The success of many new-age technology businesses depends on habit formation among consumers and one sector that has really reached cracked this is foodtech. Food delivery has become the norm across Indian metros. From the initial days of using food delivery apps to merely locate the closest restaurants or read reviews, to ordering from the swankiest of fine-dining restaurants and scoring a discount in the process, Indian consumers have become habituated to ordering from Swiggy, Zomato and UberEats for their regular meals.

Powered by huge funding rounds, foodtech majors have contributed heavily in expanding the market for food ordering in India. According to RedSeer, these players have been able to achieve this habit formation through single-serve fixed price meals, delivery capabilities beyond 12 hours, discounts and more.  

But the real question is how is it affecting the kitchens at home. In fact, restaurants are themselves having a tough time surviving in a food delivery world. 

Tapping into this expanded market for food delivery are the multiple cloud kitchen brands are replacing restaurant chains thanks to the ease of starting up. Cloud kitchen startups such as Box8, Rebel Foods, Bombay Sandwich Company, and Freshmenu. These brands differentiate themselves from restaurants with an affordable menu and standardised meal sizes. Also, cloud kitchens do not have a dine-in area and thus, solely depend on online deliveries for their revenues. 

However, the menu options in both restaurants and cloud kitchens tends to get redundant for a customer who orders every day or nearly every day. This leads them to continue shifting between cloud kitchen brands, and trying to innovate in this niche and offer an affordable alternative are home-cook aggregators. Companies such as Masalabox, Homefoodi, and Watscooking leverage a network of home-based cooks to deliver homemade meals to their customer base.

Home Food Goes High Tech

Kerala-based Masalabox has built a network of delivery partners in both Bengaluru and Kochi. The company also provides packaging materials to its homechefs, along with giving them the freedom to decide the amount of orders they can prepare in the upcoming dinner or lunch slot.  Masalabox homechefs are paid every two weeks depending on the type and number of orders they have fulfilled. The company claims to currently have 300 homechefs on its platform.

Founded by Harsha Thachery in 2014, Masalabox offers three price range of meals including mini, classic and premium meals. The company claims to be shipping an average of 800 orders per day through its mobile application. The general user demographic of Masalabox is similar to the food delivery audience — 21 years to 40 years — who have migrated from their native cities and towns for work or education. So Masalabox is tapping into the home food nostalgia to grow its business, as well as the stale feeling that ordering from restaurants might leave consumers with. 

Talking of the company’s advantage over established cloud kitchen brands, cofounder Binil Antony said the major advantage Masalabox has over these brands is the variety and the scalability that Masalabox can bring at a fraction of the cost. 

“Masalabox brings to users the much-needed alternative to restaurant food, providing authentic homemade food to its customers. The regional cuisines and traditional recipes that come out of Masalabox chef kitchens makes it a much superior quality product,” he added.

Foodtech unicorns Swiggy and Zomato have also entered the cloud kitchen space realising the huge profit potential in this model. To which, Antony said the entry of these aggregators has further contributed in expanding the food ordering market and this has had a spillover effect on smaller players. 

As per DataLabs by Inc42’s cloud kitchen report, the market size of cloud kitchens is expected to reach $1.05 Bn by 2023. Whereas, the overall Indian online food delivery market (aggregators and cloud kitchen) is estimated to be an over $5 Bn opportunity by 2023. 

However, Antony believes that the homemade food space has still not been cracked in India and Masalabox’s experience in organising this space for the past 3-4 years gives them an edge over these major players. 

Further, there is a major difference between the existing cloud kitchen brands and Masalabox — the Kerala-based company does not depend on food aggregators such as Swiggy and Zomato for delivery, outreach and setting the customer experience.  Masalabox controls every aspect of the business from onboarding of homechefs to last-mile home deliveries — this eliminates one of the big disadvantages that cloud kitchens suffer from i.e the lack of customer interaction.  

Masalabox is able to maintain meaningful relationships with its customer base, which is not possible in the case of cloud kitchen brands which lack significant market reach on independent apps.  The bootstrapped-company claims to have a customer retention rate of 40-50%.

Cloud kitchens might be less capital-intensive, but their dependence on aggregator platforms gives rise to the problem of long-term margins. Given the fact that Zomato and Swiggy have not operationally break even yet, the cost of servicing restaurants and cloud kitchens will continue to keep rising to increase aggregator’s earnings. In the long run, as aggregator platform costs increase, profit margins for cloud kitchen brands will fall sharply, and any operational expenditure advantage that they have is lost.

This is where the foodtech sector needs newer models, and indeed there’s a great opportunity for foodtech startups experimenting beyond the tested route of restaurants and the emerging cloud kitchen space. 

In these terms, models such as Masalabox do seem to have an advantage if they are able to expand rapidly and retain their customer base. That’s the biggest problem for startups in the Indian market. 

As Mobile-Only Accelerator MOX founder William Bao Bean told Inc42, one of the biggest challenges in the Indian internet market and across the world is that customer acquisition cost is high. “Big players like Facebook, Google and Amazon are taking a bigger chunk of that. A lot of companies that were traditionally making money from advertising, are covering their customer acquisition cost.”

However, the popularity of these platforms is expected to be limited to Tier 1 cities which have higher population of urban migrants looking for authentic homemade food options. And the way in which Masalabox manages to grab customers beyond this primary market will determine the success of its restaurant-free model. 

How many times have you been left wondering about the status of an interview? No acknowledgment of application mails, never-arriving rejection letters, or second round interviews that take months to schedule — India’s recruitment space is filled with cases of unresponsive employers. At the same time, applicants are not making it easier either for recruiters.

“Both employers and job seekers in India have a problem that they don’t get back to the candidates about application status, or they don’t tell the feedback. And the candidates, they don’t get back to the employers, if they want to join the company or not, there are so many situations where we see ghosting happens,” according to Sudheer Bandaru. 

Bandaru, the CTO at Shortlist, added that this kind of behaviour happens because employers and candidates feel they don’t have much stake in the recruitment process. 

Trying to solve this issue, Shortlist has added multiple compliances on both employer and candidate side to ensure they are invested in the entire recruitment process.

Employers have to pay a higher commission rate on Shortlist as compared to the average market rates along with an INR 35K retainer fee (which is, however, adjustable against a success fee at the time of a hire). 

“It’s very easy for us to lower the price and onboard more clients but at the same time, we want to onboard clients who can be empathetic towards candidate experience and can be responsive towards candidates,” said Bandaru.

Founded by Paul Breloff and Simon Desjardins in 2016, Shortlist is an online platform that connects skilled professionals with careers in India and Africa. Shortlist has a client portfolio of over 700 clients across 14 countries, of which more than 350 clients are from India. Some of its clients include DHL, ITC, Dunzo, Ather, UberEats, Rockefeller Foundation and Milaap among others. The company raised $2 Mn Series A funding round led by Blue Haven Initiative in January 2019.

On Shortlist, job applicants have to go through an intensive two-step vetting process before making it to the client’s dashboard as a potential candidate. According to Bandaru, most companies have ‘one click apply’ feature, which is a very easy way to apply for jobs. But, Shortlist’s application process is lengthy and the company had intentionally keep it lengthy to ensure that the candidate is invested in the process. 

Shortlist claims to take a show-me-what-you-can-do approach instead of shortlisting based on  just the CV. The whole process is broken into parts — one is self-demonstrated skills stage, wherein chatbot vets the candidate on basic parameters such as relocation, salary preference,  and experience level, among other things. 

Second, is the assessment stage where the candidate has to perform on-the-job tasks such as a candidate applying for finance related role could be given a spreadsheet and asked to make suggestions to their assumed manager.

Based on these inputs, Shortlist creates a holistic profile of the candidate which is not just limited to a resume or a bio. The company claims to have a turnaround time of four days to give clients their first shortlist of four to five candidates. 

The company has a team of about 30 in-house recruiters that help in ensuring that professionals are matched with the right opportunities by accurately understanding the needs of both sides This recruiter is also responsible for sourcing potential candidates from various job boards and platforms such as Naukri and Linkedin, in addition to Shortlist’s own database of 500K candidates. 

Bandaru claims Shortlist’s method helps employers make their recruitment process more data-driven along and save up to 4x the cost compared to the traditional process. “If  a company had to earlier interview 20 to 25 people before making a hire, with Shortlist that number is reduced to hardly three or four interviews.” 

The company claimed to have a 50% repeat rate among employers.

Creating Value For The Remaining 99 Candidates 

In 2020, the company will focus on creating value for the remaining 99 candidates who spend their time on Shortlist but do not get hired. From providing these candidates with regular feedback, to setting up a job-seeking related blog, the company claims to be empathetic about candidate needs. 

“In the future, if we can provide training resources to the candidate it could prove to be highly beneficial for the candidates.” 

In addition to this, the company is now working on automating more of its processes. According to Bandaru, over a period of time the company has learned, mastered and created a database which could help them in automating most of the processes for sweet spot roles. 

“For example, if an HR role is being put up again and again for some location in Mumbai. And, all the skills and requirements are similar to the previous posts, the company wants to automate the process and give similar quality outcome at a faster pace.” he added.  

The assessment services market in HRtech is projected to cross $750 Mn by 2021 in India, according to the Research and Markets 2018 report. Some of the platforms operating in the space include Scriptifi, Talview, Talent Litmus, Darwinbox, Salaryfits, DoSelect and more. HRtech startups raised $504.8 Mn funding in 2018, which is a 207% hike from $164.2 Mn figure in 2014,  according to DataLabs by Inc42. 

The foremost technology-led disruption in the recruitment space was led by job boards such as Monster and Naukri. These platforms connect employers with potential candidates through keyword-based algorithm, but that’s becoming redundant because of resume spamming and keyword stuffing, which in turn increases the hiring time, process and effort for recruiters.

Identifying this serious gap in the Indian market, new-age startups are finding ways to speed up the recruitment process but not just for businesses, as its artificial intelligence, smart algorithms can also help job seekers beat the job supply crunch in the market.

Blockchain is perhaps the hippest thing in tech these days. From being used to kickstart the cryptocurrency revolution, to applications in finance, accounting, insurance, supply chain and even for wildlife conservation, blockchain technology is everywhere.

The immutable property of blockchain lends itself superbly to processes and operations that rely on an authentic record of events and transactions. And that also includes elements where traditionally society has relied on non-tech solutions.

As voices against sexual violence and feminism gain prominence within the country, it opens a new opportunity for blockchain. Yes, like transaction details and records of manufacturing, blockchain can be used to track, authenticate complaints about sexual assaults, map the areas most impacted and also help in legal proceedings that soon follow.

That’s the goal behind Smashboard, one of the few blockchain platforms working in the social innovation sector in India.

Speaking to Inc42, founder Noopur Tiwari said that patriarchy and social norms have made life more difficult for victims of sexual crimes. In fact, Tiwari believes that this is a democratisation of the blockchain tech, given that typically women are often stereotyped as being not tech-savvy.

“Technology doesn’t do anything on its own. But it is something that needs to be shaped for and by women and feminists of all genders. It’s not that women aren’t adapted to tech. It’s that tech is too dominated by male workers.”

She added that the small percentage of women who enter the tech industry are more geared towards building a career, than making a difference. Tiwari, who founded Idea Chakki in 2013 which was funded by Ratan Tata, is based in Paris, France but told us the company is looking at India provides a digital video menu for restaurants and allows customers to gift food and beverage experiences across the world.

Other directors at Idea Chakki which include names like Gunjan Mehrish, Balkishan Sahni and Monica Narula are also contributing to the Smashboard mission.

Tiwari told us that while the startup is registered in France, it would be incorporating separate entities in each geography it enters as this would preserve the decentralised aspect of blockchain.

Social Innovation Through Blockchain?

Started in November 2019, Smashboard calls itself a feminist social media application with blockchain-driven features for survivors of sexual assault and violence. Tiwari told us the idea is to bring people trying to fight rape culture and sexual violence together and to create a space where those seeking and those in a position to provide help can come together.

Smashboard helps fix one of the most acute pain points in the aftermath of sexual assault crimes. Not being able to officially report cases of assault because of embarrassment and ambiguity about the process are the major reasons why sexual assault victims refrain from coming forward to raise their voices.

Smashboard — aimed at people of all genders fighting against patriarchy, provides a dashboard to users with various functionalities. Users are given access to mental health experts, lawyers and journalists who can be reached in case of emergencies or follow-ups. The application claims to keep the user identity pseudo-anonymous and also provides them with an encrypted personal space to record time-stamped evidence.

Tiwari told Inc42, “We are providing the support we felt we didn’t have. Being able to use pseudo-anonymity rather than become martyrs and expose ourselves for the voyeuristic satisfaction of people who don’t really care is one thing we make possible.”

She added that Smashboard is also making it easier to access and collate options for legal counseling, advice from a community, mental health care, insurance adapted for women and people of non-normative genders. “Survivors are exhausted and we don’t want anyone to be isolated because systemic violence cannot be fought by individuals alone. We all have to pitch in. So we are building a digital space that has both social and tech features.”

Given this goal, Tiwari said using blockchain seemed like a natural choice. “We saw blockchain as a great alternative to other ways of record-keeping, especially since our implementation is heavily geared towards zero-knowledge proof.”

Smashboard Blends Feminism With Blockchain

Tiwari added that Smashboard wanted a way to indisputably link anonymised artefacts and documents to the right user at any point, irrespective of whether they have chosen to lift their pseudo-anonymity or not. And blockchain provided a way for the team to do that.

The company is using the public blockchain to start with, and is exploring private permissionless chain for some specific use-cases depending on how big this gets and how soon it will need to scale up. “But that we can’t know at the moment. Our developer is doing his best to keep the tech and the feminist aspects tied in together.”

Being a former journalist, Tiwari said that while blockchain is being touted as an ideal platform to tackle fake news, a lot of fake news dissemination happens via closed networks by participants who are more than willing to spread such information, despite knowing the news is fake. She added that while blockchain has its benefits, the industry needs to see the actual potential of the technology for social innovation, before it becomes a viable tool for social impact.

The #MeToo movement in India may not have had the same widespread impact on industry and society as it has done in Western countries, but it has demonstrated that there are plenty of organisations, startups and people willing to work and fight for survivors. Smashboard tries to go a step beyond and also wants to create a digital community both at the global and hyperlocal levels to address more acute problems that the movement brought to light.

She further added “Of course, blockchain will not stop some people from claiming that allegations are made up or false. Smashboard fills gaps that as survivors and feminists fighting patriarchal violence are needed.”

It’s not a magic wand but it has a massive potential to become an incredibly empowering and empathic space.

Creating An Online Safe Space

On business model and funding, Tiwari says that Smashboard is not just a blockchain startup with the social aspect of the app being its real strength. The startup’s current business model is freemium, offering a basic service for free and with professional services, accessible through payments or subscriptions. It also offers access to exclusive content and news stories from around the world, highlighting the battle that women all over are fighting.

Tiwari said that they will be releasing basic features in the first version with more features and languages progressively. Smashboard plans to launch in Europe a few months down the line, she added.

Smashboard is currently funded by friends and family but is actively looking at seed funding. Tiwari told Inc42, “We wanted to go to investors and funders with a most valuable player proposition, a solid business plan and also be able to show that people need this. We have done that now.”

As a non-profit startup, Smashboard aims to generate revenue in the future to put back in the business and grow its presence, Tiwari told us. The team is working on various models to achieve that purpose but the implementation will take time. “The purpose of establishing the application will not be dissolved due to the revenue approach,” Tiwari added. She said that more than 50% of the services will remain free while the rest would be available on a fee in due course of time to attract quality guidance experts. She added that to offset the cost of legal and other services in the future, a number of experts would nominate pro-bono time with survivors who cannot afford to pay for the services.

Being a social media platform, the two most prominent factors that come into play is the increasing penetration of mobile phones and the internet, but Tiwari is looking at the addressable base of women smartphone users, which will be the startup’s core target audience.

“The number of monthly active social media users is expected to reach around three billion by 2021, which is around a third of the world’s entire population. Social media platforms are in massive demand as they connect people on the basis of shared interests—making all kinds of work and exchange easier. Smartphone users–162.72 Mn women use them in India. And if 1 in 3 woman faces sexual violence, we would like to propose the app to all these people.”

To celebrate India’s rising startups, Inc42 is profiling a new soonicorn every Friday in the Inc42 UpNext: Unicorns Of Tomorrow series. For the next few months, we will be speaking to founders and cofounders at these potential unicorns and shining light on their journeys and growth stories. This time, we take a look at SME lending platform Capital Float.

“In this digital age, it doesn’t really matter if you are in Canary Wharf or the Caribbean; there are opportunities waiting to be grasped by entrepreneurs,” – Richard Branson. 

Branson’s words are deep. And who better to understand this than Gaurav Hinduja and  Sashank Rishyasringa, the founders of Capital Float? Now gradually paving its way into the Indian unicorn club, the foundation of the digital lending startup was laid at a time when terms like “digital lending” and “fintech” were barely in the parlance.

Initial reactions from investors to the idea of lending were sceptical, and many felt that lending would remain a physical, analogue business for a long time.

But the duo was undeterred. ‘Digital’ was not just a term, but a revolution and they put their faith into it long back in 2013. As Hinduja recalled, in 2014, Capital Float only had a physical presence in a handful of Tier 1 cities. It was then they received an application from an SME in Bhilwara who was a mobile phone seller on a major ecommerce site.

“We started him off with a relatively small INR 10 lakh loan, which grew to an INR 1 Cr credit facility as the business was able to scale rapidly online with the help of our capital. This was an early demonstration for us of the power of a digital-led model,” added Rishyasringa.

If an idea makes one an entrepreneur, the validation of that idea add wings of success to it and there was no turning back for Capital Float after this. Over the last six years, they have disbursed INR 8,500 Cr ($1.2 Bn) to over 0.5 Mn customers in 300+ cities, across SME and consumer segments. Also, they have raised over $110 Mn in equity funding, over $300 Mn in debt funding, and originated over $250 Mn via its marketplace (co-lending) model. Here’s a brief about the company.

Capital Float: Lending To The ‘Missing Middle’

In 2013, the duo started their entrepreneurial journey with a vision of disrupting the entire small-ticket retail lending space, across SME and consumer categories. This “missing middle” segment, comprising small businesses, self-employed individuals and salaried professionals, is now estimated at being a $1 Tn market opportunity. The idea was to tap the SMEs first, diversify into consumer space later and build a common technology and data-driven credit underwriting platform that could originate small-ticket loans across the “missing middle”.

The first phase went in meeting 500+ SMEs; sourcing, underwriting and issuing the first 100 loans themselves, facing challenges and finding insights, among others. They work around creating quick and convenient short term SME loans, adopting a “low-and-grow” approach to test their early credit models and build relationships with customers. They also tried to partner extensively with entities who were close to SMEs and their needs, such as financial advisors, suppliers, buyers, as well as ecommerce platforms.

“These channel partnerships allowed us to source customers efficiently and scale early on, and also extend our reach,” said Hinduja. Fast forward to 2017, they entered the consumer financing space and today Consumer represents 50% of their monthly originations.

Inorganic But Effective: The Walnut Deal

The Walnut acquisition proved quite a success for Capital Float. “Through Walnut, we were able to crack the puzzle of evaluating digital data to offer loans to new-to-credit customers,” said Rishyasringa.

Currently, 80% of Walnut’s users are in the age group of 18-34 years while over 30% of Walnut’s users are new-to-credit customers. The acquisition also enabled them to build a strong consumer-centric, mobile-first technology DNA within the team, on top of their existing expertise around SMEs and building core lending infrastructure.

“We are now in the process of transitioning from a pure-play lender to a cohesive digital financial partner for consumers as we help consumers track expenses, plan their finances, split bills, prepare for financial emergencies, shop on online platforms such as Amazon through our checkout finance product and get personal loans via Walnut,” Rishyasringa added.

Apart from this, the company also boasts of its ability to launch a new product in less than 2 weeks,  and expertise around underwriting self-employed and thin-file individuals. Also, their experience with two-sided platforms in the SME world directly drove them towards opportunities in Consumer. For example, the Amazon partnership began on the SME side but today contributes to a large share of their consumer business, offering approved loans within milliseconds on the Amazon platform.

Setting Course For Unicorn Path

In 2013, what gave the Capital Float co-founders the confidence was a set of 4 defining trends at the time — rising digital connectivity, emphasis on building financial infrastructure, focus on data analysis and increasing acceptance to new credit sources both from private and government corridors.

But they were not alone. A number of other lending startups in the SME and consumer space have started cropping up like LendingKart among others. Capital Float, although, seems prepared for this. The company created differentiation for itself at many levels. Here’s a brief overview.

Finding the right market strategy

Being active in both SME and Consumer Finance domains, it allows Capital Float to capture a larger share of the retail lending opportunity. Experimentation is encouraged as a culture, with the right guardrails to ensure risk is also managed, thus bringing in innovations without spending a hefty amount on R&D. The ‘90 second loan application’ was one example of this.

Finding the right target audience

As Hinduja explained, they frequently engage in outreach to SMEs via strategic collaborations with business partners in smaller towns such as Unja, Narasapura, etc, while collaborating with industry bodies like CII and Assocham to present their financial solutions to specific SME segments. Also, executing industry/sector-specific marketing campaigns and content campaigns on pertinent topics like GST has proved impactful.

Robust technology infrastructure

Capital Float can process hundreds of applications for its online checkout finance product in milliseconds. Its technology architecture is built on a robust API based platform, which helps it to integrate with diverse partners within very short turnaround time. It also built its own lending stack which includes Loan Management System (LMS), Loan Origination System(LOS), and Decision Engine (DE) which is extremely unique for a fintech. This has led to higher efficiency in processes and quicker decision making.

Further, from an approach perspective, it uses automation in three areas:

• Making customer onboarding as simple by creating intelligent loan application forms, intuitive UI and UX, as well as being able to embed loan application tools into user flows of partners.
• Making efficient, instant, and accurate underwriting decisions using self-learning algorithms on the consumer end and a hybrid human-machine decision approach at the SME end. Here, the level of automation in credit decision operates on a gradient-based on ticket size and complexity
• Fully streamlining the process of loan management, repayment processing, repeat loans, and top-ups etc.

As Hinduja explained, on the SME side, their algorithms have reached an inflection point after 5 years of data enabling them to undertake fully automated SME loans. On the Consumer side, alternate data such as ecommerce data and SMS data has enabled them to underwrite new to credit customers. “We have made major investments into collections in the past 1-year blending tech, data, and people, which is key to fintech lending and has helped us design an industry-first early warning signal system. We currently have live models using traditional regression techniques, gradient boosting and have AI live for image recognition,” he added.

Innovative funding

All the above has been supported by adopting an innovative funding model comprising of co-origination with banks, securitization with HNIs and family offices, on-book lending, etc.

Spending money the right way

At each level of investment, Capital Float consolidated gains from the previous round of investment and set the stage for the next phase of growth. “For instance, post our Series B raise, we focused on achieving scale with our existing SME finance products while also building the first of our co-origination platforms,” explained Rishyasringa. He added that post Series C, they focused on deepening their SME business in terms of cities and partners, while starting to scale up their newer consumer business.

Fighting Challenges And Growing Ahead

The liquidity crunch post IL&FS last October was one of the severe challenges faced by most NBFCs in the country. Many shut down, many faced consolidation, but there were few who didn’t let their guard down including Capital Float.

“We adopted a 360-degree approach and opted for four key strategies to manage the impact of NBFC crisis.  Despite the overall slowdown, we have been able to originate over 800 crores of loans this year, clocking about 100 crores monthly. We have also been able to raise 1000 cr of debt capital on our balance sheet, 70% of which has come from banks, ” said Hinduja.

How Capital Float Managed The NBFC Crisis

• Maintaining liquidity and solvency ratios: Leverage ratio at the time of NBFC crisis was 2.2x. This was improved to 1.8x, through judicious growth and topping up our net worth through an equity infusion from existing investors (currently in process of closing a $15Mn round). It has also been able to maintain a Capital Adequacy Ratio of 40%, well above the market average
• Positive Asset-Liability-Matching (ALM): The average asset maturity has been 18 months while liabilities maturity has been 24 months, avoiding an ALM mismatch. Also, the focus on shorter tenure loans allowed them to iterate on risk rapidly and respond to changes in the overall economy more nimbly.
• Focus on Co-Origination: They were able to increase the share of Co-lending on their SME business from 15-20% pre-crisis to 40-50% in recent months. Also added 4 banks and NBFCs on the co-origination platform in the last 6 months taking the number of co-lending partners to 10.
• Focus on risk and collections: In line with the macro slowdown, the company tighten its underwriting algorithms and invest deeply in collections. This allowed them to structurally improve the quality of the credit and build out a digital “collections stack” to complement their origination capabilities.

Currently, Capital Float is working on consolidating its prior investments in technology, while increasing its investments into core products. For example, on the SME finance vertical, they’re starting to deliver a fully tech-driven real-time experience to customers and providing instant approvals on most loan applications. Simultaneously, they’re focusing on scaling consumer finance vertical to small cities and new-to-credit customers.

Going ahead, it aims to accelerate Walnut’s evolution into becoming a financial partner for the unbanked and millennials and strengthening their consumer finance vertical. Overall, the focus will be to continue to build digital solutions that deliver exceptional customer experience using the data-based underwriting models.

Friends since their college days, Amjad Ali O N, Shamnas Thattoor, Nishad K Saleem and Shakeeb Mancheri, remained close even years after completing education, thanks to their love for football. As the years passed by, the four friends who had started working in different companies realised that they wanted to build something on their own.

They tried their luck with two ventures, Keam Rank Analyzer, which would help the students predict which college they could get into based on their score in Kerala entrance exam and board exam and Ejarati, an app to manage residential apartments. While Keam was much appreciated and earned a lot of publicity for helping students, Ejariti didn’t take off too well. And that is what brought them back to their passion⁠—sports!

Meeting up for football games every now and then made them realise the one basic problem that has existed in Kerala. There was no way for a person to find the right venues to play games, no way for one to discover a new tournament or matches around and more. And that is when they decided to help change that.

“We went to play football every day in order to keep ourselves active and overcome the stress caused by our hectic job schedules. It was during this phase that we recognised there is a gap between the players and sports facilities. They are not connected and there is no one system for one to be able to discover sports facilities,” Amjad Ali, cofounder, PlaySpots told Inc42.

So in 2018, when a lot of new facilities were coming up all over India and people still had no way of discovering them or knowing their availability, they decided to bridge this gap and help fellow sports enthusiasts. “While other states such as Bengaluru still had apps to help people bridge the gap, there was nothing in Kerala. So we decided to help bridge that and within six months of us launching PlaySpots we had spread all over Kerala and in Tamil Nadu,” Ali added.

Their idea was recognised by the state’s nodal agency for startups, KSUM (Kerala Startup Mission), where PlaySpots was incubated and also received a seed loan of INR 10 Lakh. Today, it has over 50K users and over 350 sports facilities on its platform and claims to generate more than 100 bookings per day through the app.

KSUM-Backed PlaySpots – Driver Of Sports In Kerala

Even with the rise in the prominence of video games and esports in the Indian market, PlaySpots does not feel threatened at all. Ali told Inc42 that he feels that though online gaming platforms dominate the market now, outdoor sports will never go out of fashion. “Though esports has gained prominence, people are going back to outdoor sports, I do not see that threatening our operations at all,” he added.

Besides PlaySpots, startups such as Playo and Sportido are also looking at outdoor games in these times where virtual competitions are on the rise. There’s increasing competition from Curefit as well which has also entered the sports market. These startups not only help people in finding the right place to play their favourite sport but also find the right people to play them with.

But PlaySpots is looking to penetrate and take over the Kerala market to start with. PlaySpots was picked by KSUM for its incubation programme to help the startup bring its idea to life. “It was the seed loan and the productisation grant that helped us develop the product and go to the market with it,” pointed out Ali. He further said that the agency also helped the startup by giving it marketing support, connecting it to the right mentors, access to events and conferences and more.

“KSUM became our go-to place for all the help we required, from marketing to mentoring, from PR to funds and even to help us build the team that we are proud of.” – Amjad Ali O N, founder, PlaySpots

PlaySpots has been helping local talent in the state by hosting tournaments through its app, where everybody from amateurs to aspiring professionals can compete and nurture their skills. Through these tournaments, the startup is also trying to counter social issues in the sports segment, such as the lack of women players.

In 2019, it hosted a football tournament for women in the state, “We saw that on our app, 90% of our users were male. So, we started an awareness programme for women and then conducted a football tournament for them as well by the name, ‘Just Kick It’. The tournament saw huge participation from women and girls from all over the state,” Ali recalled.

Apart from helping users find the right facilities for the right sport, the startup is also helping the onboarded venues in improving the facilities management to attract more potential clients. Thanks to its back-end management app, it claims that onboarding of venues is a much easier process now. This app provides detailed schedule management to the venues, taking care of the clientele, appointments, availability and more. This further helps build a relationship with customers.

Many of the prominent facilities from Kerala are today leveraging the app, such as Albertian Sports Institute in Kochi, Diego Football Park in Trivandrum, Playasa at the Mall of Travancorein Trivandrum and more.

“We are also developing a CRM app to integrate with our back-end management app to build extensive customer relations. This CRM will study user behaviour based on the available data and make customised suggestions to the users regarding available facilities based on that data analysis,” Ali told Inc42.

The primary revenue source for PlaySpots is charging a commission from the facility for every booking through the app. In addition to that, it has tie-ups with retailers of sports merchandise in the locality, wherein retailers get a platform to promote their goods through ads. Adding to this, Ali said, “Average per-hour cost for a football/cricket ground is INR 1,200, whereas it’s INR 400 for racket sports.”

PlaySpots: Building The App And Plans For The Future

The government of India has taken many initiatives and brought in place many schemes to promote sports in India, and the current Fit India campaign is just one example. Thanks to these efforts, coupled with the efforts of startups in the segment, the sports industry in India is growing at a rate of 15%, making it one of the fastest-growing industries in the world. Government schemes that have played a major role in this growth are such as the Khelo India Scheme, Sports Talent Search Portal, National Sports Development Fund and more.

Matching pace with the fast developments happening in the segment, PlaySpots plans to help the country recognise young talent through its app.

“Through PlaySpots we also intend to provide more visibility to local talents. We are working on building profiles for our users, which will include the number of games participated in, points scored for the team, and more. We are doing this by using AI and analytics,” Ali told Inc42.

During the initial phase of development, building trust among Tier 3 audience was among the major challenges, and this was the core audience for PlaySpots. “People were not willing to take out the bookings through the app, initially. We went all over Kerala, to introduce our app to players, and to let them know the convenience of booking a facility online,” explained Ali.

Even onboarding venues required extensive travelling in the beginning. Now, the startup claims to have made enough name for itself, that if a new facility comes up in Kerala, they get contacted by the same to get onboarded in the app.

Currently operational in each of the 14 districts of Kerala, the startup has started doing market research to launch in Mumbai and Pune and plans to launch its services there, by January 2020. In addition to that, it has connections and networks in Dubai, Saudi Arabia, Congo and Qatar and is confident that it will soon penetrate those markets as well.

“We are continuously learning through our data analytics to make small but relevant changes which will ensure maximum ROI to the sport facility owners as well as our users. Building a strong and healthy community is our vision and all our efforts are streamlined towards the betterment of the society,” Ali said.

At a time when fantasy gaming has turned heads and raked in huge investor interest, a new segment of gaming in India is just opening up in the form of cloud gaming. Bengaluru-based gaming company Vimobin Labs is working on enabling high-tech graphically-intensive games on a cloud server across any Android device. Raising seed funding from a slew of angel investors, Vimobin looks to take on the likes of gaming giant Nvidia as well as Google, which launched Stadia earlier this year.

Talking to Inc42, Nikhil Prasad, cofounder and CEO, Vimobin Labs said that the company is now coming out of stealth mode having raised an undisclosed amount of seed funding from FirstCheque.vc with participation of angel investors such as Ranjit Radhakrishnan (CPO, Byjus), Farooq Adam (cofounder, Fynd), Shubh Malhotra (cofounder, Mobile Premier League (MPL)), Aprameya Radhakrishnan (CEO, Vokal, Ex CEO – TaxiForSure) and Aaryaman Vir from Prophetic Ventures.

Prasad said that the funds will be used towards scaling the technology team and working towards launching a market-ready product in the coming quarter. “Vimobin Labs is building the future of gaming and it will revolutionize how games are consumed by the next billion gamers,” said Shubh Malhotra, cofounder, MPL.

But what is cloud gaming exactly? Just like streaming music or video, if a user selects a game on the cloud gaming platform it sends a request to the server and then the server allows the user to play the game without having to download the full game to their device. The only difference with traditional gaming is that the process is happening through a network and the time taken to start playing is lower. However, cloud gaming relies heavily on high-speed internet connectivity, which makes them ill-suited for markets like India.

What Is The Problem Vimobin Labs Solving?

Prasad told us that he identified pain point of Indian gamers when his nephew asked to use his phone, instead of a simpler Android phone due to lack of space on the phone.

It is to be noted that games like PUBG, Call of Duty etc have an average install size of up to 1GB and also require a steady internet connection, which is a tough requirement in India. Even though their APK size are between 50 MB and 100MB, when the game is downloaded, the installed size easily goes above 1GB.

Prasad and his team have worked over the last few years to work on research and development to build virtualisation technology to enable high-end games on an Android.

Prasad and his cofounder Gokulkrishna Sekar are working with a 4-member team to enable Android virtualisation for highly graphic games. The users can access heavy games like PUBG, Call of Duty, Age of Empires etc and play these on cloud via one app, instead of downloading separate applications, which are too heavy for an average Android phone.

The company is targeting Indian gamers with an average smartphone worth upto INR 15K.

How Is Vimobin Solving For Latency In Cloud Gaming?

As we hinted above, cloud gaming requires high-speed internet with low latency. While the launch of Reliance Jio ensured easy access to 4G internet, the internet speeds, in comparison to global standards, are low and have high latency.

Latency, measured as ping, refers to the average total time that it takes your gaming device to send data to the game server, and back to your device. Anything below 50 milliseconds is considered to be great, while anything over 150 milliseconds could result in noticeable lag i.e delay in users pressing buttons and action happening on the screen.

Hence, while there are several console and mobile games that target Indian audiences, latency remains a common issue. And Vimobin will certainly face issues with latency as internet speeds improve across the country.

India’s Gaming Market Matures

Interestingly, Vimobin Labs says that while a game on Google Stadia, Nvidia etc may use up to 30GB for every hour of play time, Vimobin users can play for an hour spending only 400 MB internet. “We may be able to further reduce this as we develop our technology,” Prasad added.

Additionally, Vimobin is banking on higher broadband speeds in the country. Reliance, for example, has promised that it will provide zero latency gaming experience in 4K resolution, powered by its Jio Fiber broadband connection which is said to have speeds ranging from 100 Mbps to 1 Gbps, which range from INR 700 to INR 10K per month.

It is notable that at present, game companies have introduced lighter version of their titles to attract audiences playing on low-end devices. However, this fragments the market and users often switch between multiple apps depending on the availability of other players.

In the last two decades, PC and console gaming have played a significant role in shaping the gaming industry in India. However, with the inception of mobile gaming platforms, the overall gaming ecosystem has started to shift from large-screen gaming to smartphones.

According to Statista reports, India is also following the global shift in gaming patterns as the mobile gaming industry in the country is expected to reach about $405 Mn by 2022.

The report further stated that the overall gaming industry in India stands at around $862.82 Mn in 2019 with computer and console gaming still marking their presence in the overall growth with a market share of $96 Mn and $240 Mn respectively.

Vimobin Goes Up Against Google, Nvidia And Microsoft

Even though cloud gaming is an inherently new concept in India, the idea has been under works internationally for some time now.

For instance, we have NVIDIA is working to expand its GeForce Now cloud gaming service to Android phones including Samsung and LG. However, this would require a separate controller for full experience, similar to Stadia.

Then we have AWS Stream, which Amazon is planning to announce as its own cloud gaming service next year.  We also have players such as Final Fantasy publisher Square Enix, which is working to bring its AAA console games to mobile, which runs on cloud. We also have players such as Vortex in India, which are leveraging cloud gaming for Indian gamers. Microsoft is also looking at cloud gaming seriously.

Google lets players virtually stream games from Stadia’s cloud servers without even downloading it to the device. Google ultimately wants to enable this on Android phones and will let players start a game from a YouTube video without needing to download anything.

The Us tech giant seems to be hesitant in launching the new service in developing countries including India and it might have good reason to do so. A Junglee Games spokesperson had then said that Stadia is unlikely to launch in India because of how bandwidth-intensive it is.

Claiming to be focused on developing countries like India and having tested product in countries like Vietnam, Bangladesh, Nepal etc, Vimobin Labs is trying to solve simple gaming issues in these markets.

Prasad told us these players are essentially leveraging PC virtualisation and have stayed away from building for India-specific issues, which Vimobin intends to fix.

Being an agrarian economy, agriculture has always been at the heart of all development and economic activity in India. With time, the stakeholders of the agri-ecosystem have turned to agritech to solve the intrinsic challenges using technology at all levels. Whether it is supply chain for farm-to-table or crop and weather intelligence. But others are tackling a more basic issue — losses and credit availability.

With more than a decade of experience in agri finance, Sandeep Sabharwal, the CEO and founder of Sohan Lal Commodity Management (SLCM), is addressing these two major global problems. SLCM provides warehouse management, agriculture financing, collateral management and procurement services to farmers, processors, millers, traders, importers, exporters, commodity exchanges and the government. Its tech-enabled warehouses not only offer safe storage and protection services, but also help in streamlining supply of agri-commodities.

“The thought of SLCM struck me when I was managing a family-owned business of food processing unit, where I faced issues such as abnormal losses, bad crop protection and unavailability of finance,” Sabharwal told Inc42.

Being an infrastructure-driven sector, these problems end up increasing post-harvest food loss and stressing the agriculture sector.

Founded in 2009 with a meagre investment of about INR 16 Lakh and a team of four, SLCM has created a technology-enabled network of more than 4213 warehouses, 19 cold storages spread over 68.15 Mn sq ft across India and with a throughput of 831.43 Mn metric tonnes. In FY 19-20, SLCM clocked the revenue of INR 722.22 Cr and generates employment for nearly 59K people directly and indirectly.

While SLCM is named after Sabharwal’s grandfather (Sohan Lal) to continue the business legacy, the new internal name for the company is “So Lets Change Minds”, the founder told us. This gives the agritech startup a global appeal.

Here are some key facts around the company.

• Total funding raised so far: INR 370.16 Cr
• Key investors: Incofin Investment, ResponsAbility, Nexus Venture Partners, Mayfield, Everstone, ICICI’s Emerging India Fund
• Presence: Pan-India and operations in Myanmar
• Number of clients: 5016
• Average capacity of a warehouse: 1500 metric tonnes
• Number of commodities handled: 930+
• NPA % on loans: 1.04% (as on March 2019)
• Amount of loans disbursed: INR 2042.42 Cr (till Nov 2019)
• Loan book size: INR 192.72 Cr (as on March 2019)

The Beginning Of SLCM’s Agritech Journey

“One can face the entire world if your family is by your side but that time was tough. As I took a decision to shut down the well-established family business (a food processing unit) and set up SLCM, my father didn’t speak to me for two years,” recalled Sabharwal.

But he was determined. His initial research made him realise the need for a service-driven approach to minimise post-harvest losses (around 10%-15%) that farmers incur for staple agricultural produce like wheat, paddy, pulses, spices, fruits and vegetables. “We thus launched SLCM as an asset-light model. We started working irrespective of the condition of the warehouse with efficiency in reducing post-harvest losses to merely 0.5% using scientific techniques,” he added.

While SLCM started earning revenue from the first year itself, it was very little compared to the business that Sabharwal had shut. “My father finally got the confidence when I received the first PE funding from Nexus Venture Partners in May 2010 and after that, there was no looking back,” chuckled Sabharwal.

Today, the group has seven marquee institutional investors on-board through four primary successful rounds of funding and one secondary round. These investors have invested up to the Series D stage and hold 82.12% stake in the company.

With time, the company has also extended its presence into other verticals as well as crossed international borders. In 2014, it started operations in Myanmar offering warehouse management solutions. Also in March 2014, SLCM commercialised its NBFC division in the name of “Kissandhan” for the financing operations.

The SLCM Backbone: Patent-Pending AGRI REACH Process

Sabharwal claims SLCM is the only company in agritech which has a centralised real-time process management system. “We have applied for the patent of our “System and Methods for Real-Time Data Management” and have named the process as ‘AGRI REACH’.”

“AGRI REACH”, is the culmination of all the processes, methods and systems that the startup follows to maintain the health of the crop and start operations of a warehouse in just 24 hours at any location irrespective of infrastructure and provide a standard operational experience in all facilities.

It is basically an algorithm which combines a series of processes, audits and real-time tracking of the facilities to give error-free results and deplete the risk of crop damage. It uses techniques like geo-fencing to bar-coded storage receipts to avoid theft, pilferage, and conducts internal audits along with a “Maker and Checker” policy at each level.

Agri-Warehousing: Maintaining Day To Day Challenges

Agri warehousing accounts for approximately 15% of the warehousing market in India amounting to almost INR 8000 Cr- INR 8500 Cr. It has been growing at a rate of over 10-12% the last few years. At present, the agri warehousing capacity in India is more than 120 million metric ton (MMT), and it has been growing at 4 % CAGR over the last 3 years.

SLCM is looking to tap this opportunity with new-age technologies. In order to ascertain a smooth day to day functioning, SLCM has incorporated many key technical and regulatory processes. This includes:

• SAP backend to automate the complete process of warehouse management
• “Maker & Checker” policy at each process and level to iron out all the possibilities of mismanagement of the stocks
• A backend team to monitor warehouse managers,
• An internal Auditors and the Audit team of 26 members to verify information collected
• Geo-fencing technology to supervise the audit team

As revealed by Sabharwal, 86 audits are conducted at a frequency of daily, weekly, fortnightly, monthly, quarterly and yearly basis on various processes to check quality standards. With real-time resource monitoring, the team ensures to bring even the slightest deviation in the stocks to the notice of the management.

Increasing frauds in the sector are another challenge at hand. As Sabharwal told Inc42, the industry has been hit by a series of large scams in Gujarat, Tamil Nadu and now the latest is in Andhra Pradesh. Some agencies have even exited this business. As per an estimate, fraud to the tune of INR 6300 Mn has been reported so far in the last three years.

To beat this, SLCM has introduced bar-coded receipts as good as legal tenders to eliminate the risk of fraud in terms of fake storage receipts, boasted Sabharwal. “We work on the principle that if the receipt mentions a particular grain of a particular variety in a particular warehouse, it had to be there and that is the basis on which our business is built & followed the practice to the core at the level religiously,” he added.

The Second Pillar Of Success: Agri-Financing 

Ideally, in agri-financing; land, other valuables and balance sheets are considered as collateral to extend finance to farmers and other stakeholders. However, SLCM offers finance to farmers purely against crop as collateral irrespective of balance sheet or net worth. Since such agri-commodities have an established value and market, quick liquidation mechanisms provide sufficient funds to cover a loan extended against them in case of a default.

Other parameters such as type of asset being financed, borrower profile and repayment capacity, loan to value ratio, geography (location) of the borrower, end utilisation of the asset among others are also considered.

“This reduces the risk of distress selling. Additionally, the farmer saves 9.5% of its produce during the storage period which would have been degraded otherwise,” added Sabharwal.

Collections are also simplified at SLCM. While releasing the commodity a customer is supposed to pay principal and a simple rate of interest and other applicable charges to release the lot wise stock. To get their collateral released, borrowers are required to transfer the applicable amount (dues) from the official account to the Kissandhan account. “Once we receive the confirmation from our accounts team about the received payment, we release the collateral.”

Is Collection A Pain Point In Agri-Finance?

Despite loan waivers and government intervention, farmers are considered the riskiest asset class to lend to, Sabharwal has a different opinion here. “Warehousing (Development & Regulation) Act, 2007 introduced a negotiable warehouse receipt system which helps the farmers seek loans from banks against NWR to avoid distress sale of their agricultural produce,” he explained.

In this system, goods are first brought to the collateral manager who issues a warehouse receipt to the borrower that certifies the quantity and quality of the stored goods or commodities. The storage receipt of the goods or commodities issued by the collateral manager act as collateral for the loan.

A well-developed warehouse receipt finance system benefits farmers, banks, financial institutions, insurance companies and commodity exchanges. In the agri-credit space, the borrower’s commodity collateral against which the credit is disbursed is increasingly being assigned to professional collateral management companies.

Banks are the ultimate beneficiary in a warehouse receipt finance system as the average tenure of loan against warehouse receipt is around six months which helps banks with their asset-liability mismatch issues as they can churn portfolios quickly.

Further, lending against warehouse receipt is safer and more liquid for banks. Collateral managers actually make the job easier for banks as far as underlying collateral is concerned. Warehouse receipt financing also help banks achieve priority sector lending targets in an efficient way.

The Three-Step Strategy For Differentiation

In the last few years, a number of players have made their mark in the agri-tech segment across all niches. Names such as Freshokartz, Ninjacart, Farmtaaza, Waycool and Crofarm among others have disrupted agriculture in a positive manner. When asked about the strategy to deal with competition from new-age players, Sabharwal said that any entity dealing in commodities be it farmer, trader, processor, importer, exporter, SME etc. would require warehousing. All one needs to understand is the production and consumption cycle of food production.

Overall, the company is creating differentiation for itself across three areas:

• Process: Using scientific warehousing technology coupled with the agriculture domain expertise to store any kind of agricultural crop, agnostic to infrastructure, location and weather patterns.
• Impact: In a country like India, where post-harvest losses are pegged at 10% of the entire product which amounts to INR 1 Lakh Cr of loss, SLCM has been instrumental in devising technology to cut these losses to 0.5%. This has the potential to save INR 99.5K Cr, irrespective of the condition of the warehouse.
• Service: SLCM has developed forward integration into warehouse receipt financing, while other agri-focussed NBFCs are not based purely on the crop as collateral.

Going forward and for 2020, SLCM has plans to explore Southeast Asian countries like Cambodia, Laos, and mapping their tech to changing DNA of Indian agriculture in the near future. They are actively scanning the environment for inorganic growth via acquisitions in the allied sector of supply chain management as well.

“The sector we are addressing is extremely large and underserved, so to say quantify my competitors would be myopic in vision. Though I would like to say that there are various companies that are doing some parts of the services that we do,” he added.

The touch and feel of offline shopping or the convenience of online shopping? Will ecommerce take over physical stores? These are the most prominent questions India’s retail industry is pondering over today.

Offline retail has a set of advantages that online retail just cannot match – shopping experience, getting a look and feel of products and trials. But the convenience of online shopping has made it a big channel for fashion products as well, despite the fact that the fashion and apparel segment has the highest return rate among products, and more than half of them are due to unsatisfactory size.

The benefits of ease, choice and discovery are now being combined with a high-tech approach to solve this big issue. Clothing size varies enormously between brands, and even within different collections of the same brand, so it’s very easy to get one’s size wrong. Measurement charts and size recommendations aren’t very effective as they are mostly generic and many times people overlook them completely.

Most ecommerce stores see 30-50% returns on clothing and about 60% of the returns are due to incorrect fit and another 30% are due to the look. This is where fashion tech startup Bigthinx comes into the picture.

Bigthinx’s software effectively targets these problems with tech intervention and aims to combine the ease and variety of online shopping with the advantages of offline shopping. The company uses AI to solve the two biggest pain points in online fashion – size and look.

Pivoting From Edtech To Fashion Retail

Bengaluru-based Bigthinx started out as an Edtech company in 2015 building virtual science labs for school and college students where they could perform entire science experiments in virtual reality via VR headsets. Founders Shivang Desai and Chandralika Hazarika even signed up one of the major school chains in India to start using their software but struggled with getting them to pay and eventually decided to move out of the edtech sector.

“We started to look out for other industries where our skills could be leveraged. Fashion retail was one such space that caught our attention. It is a dynamic industry with huge potential for improvement in processes, customer engagement, online retail and several other areas,” Desai told Inc42.

Just last year, in the US alone, brands lost $284 Bn in potential sales due to online clothing returns. 84% of all returns are incinerated or landfilled, which has a huge environmental impact, Desai added.

The founders realised that retail is also an industry that has seen relatively little innovation, especially in online retail. Virtual mirrors in stores for virtual try-ons became popular somewhere around 2014-2015, but came with a host of inherent challenges – expensive hardware, connectivity, no information on clothing fit, and trials in public spaces. Furthermore, there was no way to use this technology for the rapidly growing ecommerce segment.

“This is when we had the idea to build a method for identifying size, fit, and delivering virtual trials when shopping online to help consumers shop better and enable brands to cut costs on free returns,” Desai said

As Bigthinx cofounder Hazarika recalled, “We reached out at the time to the founder of a fashion unicorn who met with us to share his insights. He told us that his company had previously acquired a US-based startup trying to do the same thing as us but it ultimately didn’t work out. This encouraged us as sizing and returns was a problem in the ecommerce sector, but retailers had just accepted returns as a cost of doing business. We remained convinced that the product we were describing was an absolute necessity for the ecommerce industry,” said Hazarika.

Desai and Hazarika created their first prototype in 2017 when realization dawned that, as a small startup, the only way to compete with some of the existing alternatives in the market was through automated personalisation and clothing creation.

“It was then that we met Mr Pradeep Guha, the former president of the Times Group and current CEO of 9X Media. Pradeep was completely convinced by the vision and joined us as an investor-partner in the venture. This was when we started building the AI which could make us market leaders in the fashion fit and trials segment,” Hazarika told us.

The Creation Of Bigthinx’s Walkabout 3D Avatar

In mid-2019, Bigthinx released a test app of its Lyflike 3D imaging software to understand how users were reacting to and adopting the technology. The Lyflike app lets users to set up a personalised, walkabout 3D avatar and use it for clothing trials. The AI could either auto-generate clothing from any 2D picture or users could design and try on their own clothing. The platform would match their creations to real products available online.

The app got a few thousand downloads and helped the startup shape the core features its B2B products. After this experiment, Lyflike was taken down as a B2C app and reshaped into a B2B product which any online retailer could integrate into their own website or app.

“In September 2019, we released Lyfsize, an application that carries out human body scans from two smartphone pictures. It immediately gained tremendous interest and has been adopted by customers in Sweden, Finland and India with use cases ranging from ecommerce to P2P clothing rentals (Sweden) to modelling talent agencies (India, Sri Lanka, Nepal) to uniforms and workwear (Finland, India),” Desai added.

Bigthinx founders explained the other applications of the Lyfsize software

1. Modelling
   Working with an upcoming talent agency for the fashion industry, Bigthinx is positioning its platform as the future of fashion talent and technology. This collaboration helps models get body measurements using just their smartphones so that event organisers can have clothing customised for them ahead of time. It also prevents the human errors that occur when people measure themselves.
2. Uniforms and Workwear
   Workwear and uniforms form a vital requirement for many companies, especially from a branding and consistency point of view. Large companies have to design uniforms in line with their workforces around the world, adapting to the varying cultural needs of each geography. Not only does the Lyfsize application let them save time and labour costs, but also gives access to data that’s very useful in future decisions.
3. Mass Customisation
   Another advantage of mobile body scanning is it gives information beyond just body measurements. Body shape data can be broadly interpreted to allow clothing brands to deliver mass customisation, intermediate sizes and optimise production according to their audience.

Going Back To The Consumers

Bigthinx’s Lyfsize and Lyflike AI software not only determine precise body dimensions but also matches users with their ideal size for any brand, providing data on fit, flow and fabric movement. It allows them to see how clothing looks on a 3D virtual, walkabout avatar that looks and measures exactly like the user. Naturally, one would expect the consumer-side applications for this tech to flourish, but that’s still nascent in the retail world.

In the offline space too, consumers can use screens or tablets in physical stores to call up their own avatar and instantly virtually try on hundreds of different outfits and combinations without effort. This is particularly useful in sale-season when stores are overcrowded and lines for dressing rooms are endless, and also for stores specialising in ethnic wear where trying on multiple outfits would be a cumbersome and exhausting experience. So clearly, there is a market for this product in the consumer side.

The 3D body scan carried out by Lyfsize using only one’s smartphone gives 44 different body measurements with over 95% accuracy. For reference, this is more accurate than most professional tailors.The Lyfsize (3D body scanning) product operates on a B2B2C model whereby the startup licenses or white-labels the app to retailers and they distribute it to customers.

For the B2B model, Bigthinx’s Lyflike APIs are integrated into etailer websites or apps and allow real-time clothing trials for consumers.

“We have so far partnered with online retailers in ecommerce, bespoke fashion, fashion rentals, uniforms manufacturers, and fashion talent platforms. One such platform is InchStreet, which is an online aggregator of men’s bespoke clothing providers, where one can choose one’s suiting and styling needs and have it created by the provider of one’s choice,” said Desai.

For InchStreet, it was imperative to get accurate body measurements and they chose to use Lyfsize to eliminate inaccuracies in measurements. Customers in India had disparate measurements due to geographical and cultural differences. Bigthinx standardised measurements and helped Inchstreet overcome this limitations.

The startup’s products are priced as SaaS models based on the expected slab usage and billed on a recurring rate. This allows us to serve various customer groups ranging from massive e-commerce companies to independent designers.

“For fast fashion ecommerce platforms, our AI automates the clothing digitisation process and can realistically auto-create up to 100% of menswear and between 60-80% of womenswear (depending on the complexity) in a matter of a hours,” Hazarika told us.

This extends to catalogues ranging up to millions of SKUs. “When compared to the existing methods of digitising clothing – 3D modelers or 3D scanners – our system is vastly faster and cheaper, allowing almost entire catalogues to be newly digitized every time seasons and styles change,” she said.

The Prada Cohort And Future Plans

Bigthinx was invited to Milan by Startup Bootcamp (SBC), one of the world’s largest accelerator networks, to participate in the selection process for its maiden fashion tech accelerator. The accelerator’s main partner is Prada along with several other heavyweights such as Sopra Steria, Accenture, PwC and others. Having already screened over 1200 fashion tech startups, including hundreds of in-person meetings around the world, Bigthinx was among the top 20 contenders invited to Milan.

“They reached out to us only two weeks before the main event and urged us to make a trip to Milan for the four-day selection event as they believed we had the right technology to meet the needs of their partners in the fashion industry. After a lot of discussions with our advisors and also VCs, who encouraged us to attend, we decided to participate,” said Desai.

In Milan, the startup pitched and demoed products to over 150 programme mentors, including the owner and top management of Prada. Bigthinx is the only company from India to be selected and will be working closely with the programme’s partners from January 2020 onwards.

“Over the next year, our plan is to work with the world-leading luxury brands which we now have access to such as Prada, Sopra Steria and others, as well as to deploy our products into ecommerce web shops in Europe with the learnings we derive,” said Hazarika.

As Bigthinx’s products are pure software pieces, the startup has the ability to scale its customer base rapidly. Their plan is to acquire several major European ecommerce players as paying customers within the next few months, after which their sights are set on the US.

The expansion plan is to enter each geography with well-established local partners that have broad and deep ecosystem knowledge, connections and existing networks. In the next two years, Bigthinx expects to serve large consumer bases for fashion products in the US, Europe and a few other Asian markets.

It is also deploying the Lyfsize software in fitness studios to allow users to track body transformations and health risks, and take appropriate course corrections. Over the course of the next three years, Bigthinx plans to diversify into the healthcare and gaming sectors.

“Our competitive edge lies in a combination of several components – focus on automation, constant innovation, defensible IP, speed and agility. Staying ahead of the curve in all of these aspects is what will keep us competitive in the years to come,” Desai said.

Correction Note: Some sections of this article have been edited post-publishing to fix typographical errors and improve clarity of language.

To celebrate India’s rising startups, Inc42 is profiling a new soonicorn every Friday in the Inc42 UpNext: Unicorns Of Tomorrow series. For the next few months, we will be speaking to founders and cofounders at these potential unicorns and shining light on their journeys and growth stories. This time, we take a look at fintech startup MobiKwik.

Cashback and discounts — the two primary factors behind value-conscious Indians finally taking the digital payments plunge. But are fintech companies and startups even thinking of profits or is it just a mad race to acquire more and more users? That’s the question that many fintech players have been faced with over the past year. 

Over a decade old in the fintech space, even MobiKwik’s team pondered over many such questions about running a sustainable business and cutting down the reliance on discounts which make up a big part of expenses. The changes it put in place led MobiKwik to achieve operational breakeven in FY2019 along with earning gross revenue of INR 184.6 CR. This was a significant leap from the company’s INR 69.29 Cr revenue in March 2018. 

“In late 2018, we had this reckoning that if we can’t figure out how to make money on our current 60 – 70 Mn user base, how will we ever make money on, say, 100 Mn users?” – Upasana Taku, cofounder of MobiKwik. 

The answer came from looking at banks such as HDFC and Kotak, which have relatively fewer account holders in comparison to public sector banks such as SBI, but in terms of valuation, both are worth billions. So one of the steps MobiKwik took to achieve this bank-like sustainability, Taku told Inc42, was by shifting the cultural focus of MobiKwik growth from deals and discounts to a more sustainable, but far less attractive, assured rewards system. 

Ending The Culture Of Discounts

According to Taku, the culture in the payments industry today is such that people feel it’s mandatory to spend 3% of their revenue on incentives. This thinking had also percolated into MobiKwik’s team, which has over 300 employees now. “We would constantly get arguments that there’s market pressure from competitors and so we also have to have the best deals,” she added. 

But we decided to go a different direction with our points-based loyalty program — ‘Supercash’. Users can avail 5% saving on any transaction against their Supercash collection. This decision did face a lot of internal pushback with some teams saying that points-based incentives will wipe out MobiKwik’s customer base because competitors are giving out hard cash. “But we decided to go with it, anyway”, said Taku.

This move was backed by the company’s analysis of its customer base, which showed that less than 3% of MobiKwik’s users were latching onto each and every deal. Other than that, users were equally divided between the ones who took advantage of some discounts and the ones who had never used any coupon or discount deal. 

“We took the call that we don’t need this 3% because their attention is anyway poor. Today, they are on our platform, tomorrow they will go wherever there’s a better deal”, added Taku. 

This approach is said to have increased the company’s retention rate by about 23% along with a significant jump in average revenue per user and the number of transactions per user. 

Gurugram-based MobiKwik — founded by Bipin Preet Singh and Taku in 2009 — claims to have over 110 Mn users and 3Mn merchants today. In October 2018, MobiKwik added multiple financial services to its platform including credit, insurance, gold loans, and mutual funds. This was in addition to bill payments, B2B payments gateway, and digital payments services. Is MobiKwik getting ready for the super app battleground?

MobiKwik’s Fintech Super App Play

Out of its wide service portfolio, the credit business is said to be making the most revenue for the company. MobiKwik claims to have disbursed 1.2 Mn loans, amounting to $152 Mn. The company is targeting the middle-income users of India who are underserved by the existing bank ecosystem. The loan size ranges from INR 2.5K to INR 5 Lakh.

The company claims to have developed its own machine learning model which generates a credit score (Mobiscore) for users, based on which the creditworthiness of users is estimated. The factors considered by the MobiKwik algorithm include the user’s age, monthly spending, vehicle ownership, and payment pattern. 

By gaining access to the user’s SMS inbox, MobiKwik is also able to track if a user is running late on bill payments and whether they are paying a late fee on their bills or credit card. In addition to this, the size of the user’s electricity bill gives them access to the user’s full address and also aids the estimation of the user’s house rent and cost.

Offering an ecosystem of financial services is not a new thing in the payments space. Both PhonePe and Paytm have been trying to increase customer retention and revenue by expanding the service portfolio. 

Taku said that MobiKwik has made offline merchants advocates for the credit product. MobiKwik is giving referral commission to merchants against every conversion made on MobiKwik credit. She added that competitors such as PhonePe and Paytm have not built up the credit offerings to the extent that MobiKwik has done. 

“We are enabling our merchants to become sort of our distributors to the extent that it also becomes a new stream of revenue for them. It’s a new engagement tool for them. And it’s also a tool for them to increase their ticket size.” 

The credit product is also said to have increased merchant retention for the company. 

In terms of competing with the plethora of digital lending companies, Taku said that none of these players has access to the volume of customers that MobiKwik is able to acquire organically every month. Taku also feels lending rivals are usually solving for a single use-case whereas MobiKwik’s credit offering can be seen as a general credit card which is compatible with all kinds of user needs.  

Although payments and credit are the two major pillars of MobiKwik’s growth, the company does have plans to add more financial products to retain its customers.

Going Beyond Unicorn And Eyeing Decacorn Valuation 

In the background of Paytm’s recent decision of adding transaction fees on loading money from credit card to digital wallet (above a monthly limit), Taku said, “I’m not a big believer in charging consumers for loading money from their credit card. If I want to use the credit card for my spending then I should be allowed to do that. I would try to ask the merchant to pay more for a credit card user because the spend of the user is riskier, but not the consumer.”

In terms of targets, the company is said to be on track for $70 Mn in revenue for this fiscal and aims to reach a $100 Mn revenue mark in the next four to five months. “The unicorn valuation would happen soon but our aim is to achieve long term valuation,” Taku said noting examples of WeWork’s recent saga as a cautionary tale to say that private market valuation is not the end goal. 

“Our dream is to reach a decacorn valuation in the public markets, where a common retail shareholder is willing to buy our share at a fair price. And this is something that we will have to learn from the stalwarts of financial services.”

The rise of digital platforms such as Uber, Ola, Zomato, Swiggy and a slew of consumer-facing internet businesses has transformed the way people work, socialise and generate profits. Platform or gig economy has made it possible for customers to access services without actually having to ever interact with the aggregator — in an ideal scenario.

Naturally, the gig economy presents more risks for employers as typically these transient workers do not have robust documentation for background checks and screening. So while gig economy is a real employment opportunity for many unskilled workers, there is a lot of friction in hiring. Questions center around the trust-worthiness of both service providers and customers. This risk is intensified with recurring instances of crimes in delivery operations thanks to weak background checks. 

In order to mitigate these risks, gig economy companies rely on AI-powered background checks and as with most innovation for gig economy, startups are at the forefront here too. 

“The biggest challenge everyone was facing in background checks was that there was an information depository available on individuals in terms of making hiring decisions, initially, and large companies had huge workforce of 30K-40K employees where onboarding was very expensive for them to just keep them line till the time they don’t get background checks done,” said Varun Mirchandani, cofounder of Helloverify.

Noida-based SaaS startup Hello Verify’s software allows them to verify thousands of people in minutes instead of days or weeks. The startup allows enterprises to rapidly hire at scale with ease, through its machine learning and AI technology platform which increases the speed of background screening, catches more bad actors, and thus ensures a more accurate offering as compared to the traditional ways of background checks.  

Founded by brothers Karan and Varun Mirchandani in 2018, Hello Verify today employs over 300 people, has conducted over 5 Mn background checks and counts over 110 enterprise customers among its clients. Its investors include Lead Angels Network, Y Combinator, Data Collective, and VentureSouq. The company was also a part of the Winter 2018 batch of startup accelerator Y Combinator. 

Machine Learning Does The Screening

Helloverify’s collaborative technology mechanism where the onboarding is performed by a combination of computer vision and proprietary algorithms. The company database is able to tap into public databases such as UAN (used for Provident Fund contributions), driving license, PAN card, Aadhaar, court records and more, to offer a 360-degree view of an individual’s background. 

Helloverify claims to have created a proprietary database of fake suspect companies, fake education qualifications, and fake education degrees, which helps the machine to automatically alert when a candidate has entered any fake details on the documents. The system can also run cross-reference with other existing documents in the public domain to mark any inconsistencies in the details shared by the prospective hire. 

How does the system help bulk recruiters? “When we work with Ola in over maybe 10 cities, we’ve been able to demonstrate that and our accuracy level is more than 99% and we’ve been able to validate maybe over 30K plus drivers for them,” said Varun.

Helloverify systems do involve 10% human dependency, where a person has to feed in new information into the system such as a fake university which has recently surfaced in an application or update the other databases. And once that learning happens, the systems are said to automatically pick up and continue learning as it goes forward.

Varun believes that this mix of human and machine participation will always remain because in a large country like India, one needs to make sure the tech is right, but obviously, 10% of human intervention will always be required in some form or the other to add that nuance.

Helloverify charges clients for each background report or screening. This could be a new-hire or on-going checks for existing employees. The checks are done on the tailor-based requirement, thus the cost of every check depends on the requirement though the company is said to introduce a subscription plan soon for companies to do bulk screenings. 

While Helloverify has already got the likes of Indigo, Ola, Uber, Infosys, HeroFinCorp, Axis Bank, ICICI Prudential and Genpact as clients, it faces competition in the form of AuthBridge, Verifitech India, KPMG’s SpringVerify and the US-based First Advantage among other players. 

Expanding Use Cases And Going Beyond Job Screening

The screening market in India is exploding today. Job portals in India have over 50M individuals and 75K companies listed on their platforms for recruitment needs. This market alone is pegged at $2 Bn. However, Helloverify’s capabilities are not just limited to hiring. The company is looking to tap into an even larger opportunity by creating products for peer-to-peer lending, governmental purposes, and online marketplaces. 

This extensible approach is estimated to allow Helloverify in addressing a large base of 100 Mn individuals in India over the next five years.

In addition to screening candidates for hiring purposes, the company has also entered the financial services space by collaborating with Axis Bank. It has collaborated with embassies in India to provide a robust screening process for visa applicants as well.

Varun envisions the company’s system to be a huge benefit for the digital lending and underwriting process. Digital lending is exploding in India and has driven fintech funding in 2019. Helloverify is also said to be working on a product in collaboration with Magicbricks for screening tenants and hosts.

With the world moving towards the platform economy, where teams continue to collaborate and work remotely, and where workers are transient in nature, the need for background checks will only keep rising. Manual verification is simply too prohibitive from cost and resource point of view, and all digital businesses would need to use Helloverify or similar products to support rapid growth. Simply put, it’s a good time to be in the business of background screen and identity verification.  

To celebrate India’s rising startups, Inc42 is profiling a new soonicorn every Friday in the Inc42 UpNext: Unicorns Of Tomorrow series. For the next few months, we will be speaking to founders and cofounders at these potential unicorns and shining light on their journeys and growth stories. This time, we will take a look at the automobile marketplace, Droom.

“We are an internet company working in the automobile sector, and we don’t want to change that.” — Sandeep Aggarwal, CEO, Droom

What Aggarwal hinted at without saying is that the market is perhaps going the other way. In fact, India’s ecommerce platforms and consumer services marketplaces have clearly been moving towards the offline channel. This omnichannel approach has paid rich dividends in the form of increased reach, better customer service and a share of the massive retail market.

Combined with a focus on tier 2 and 3 cities for the next phase of growth, this omnichannel presence has become something that everyone wants a piece of. It’s a change from the time when startups talked about reaching customers using technology.

Having forged an identity as an automobile marketplace, Droom is keeping itself away from the omnichannel hype. Aggarwal is betting that creating an automobile ecosystem with low capital expenditure and fewer owned assets will be more sustainable in the long run, than scaling up in the offline channel and then cutting costs later on.

The Competition Moves Offline; Droom Stays Online

The Droom founder and CEO told Inc42 that the focus is on staying online and will always be on bringing the pieces of the offline ecosystem online.

Droom lets consumers and businesses buy and sell used and new automobiles. It follows four business models to achieve maximum penetration on both seller and buyer side i.e. B2B, B2C, C2C, C2B.

Its ecosystem around used automobiles involves services such as Orange Book Value (used vehicle pricing engine), Eco (vehicle inspection), History (track record of used vehicles), Discovery (dozens of pre-buying and selling tools) and Credit (used auto loan and dealer financing). This is Droom’s attempt to bring value across the used automobile buying journey and it has no offline stores, Aggarwal said.

On the other hand, competitors such as CarDekho, Cars24 and others continue to bet on building an offline presence and leverage omnichannel growth. In H1 FY20, GirnarSoft-owned CarDekho launched 28 new ‘Gaadi’ stores, bringing the total number of stores to 56 in 17 cities.

Further, Cars24 has more than 50 branches across 12 major cities in India and is backed by a team of more than 700 employees. However, last year the company faced issues and had to shut down multiple stores in Delhi-NCR.

With over 430 employees, Aggarwal told us that over half of this workforce is on the product and technology side. Over the last few years, Droom has been eyeing an initial public offering. While the IPO was first meant to be launched in 2019, and then 2020, the company is now looking at 2021 as a realistic target, given the company’s losses.

Droom reported a loss of INR 128.54 Cr in FY19, up from INR 73.97 Cr in FY18. The company’s expenses in FY19 were INR 274. 4 Cr with an operational revenue of INR 136.43 Cr.

But Aggarwal is optimistic. He said the gross merchandise volume (GMV) of $1.2 Bn for 2019 with net revenue of $35 Mn bodes well from a projection point of view. “Our operating loss as a percentage of GMV has gone from 9% in 2015 to 1.65% of GMV in 2019. We will further reduce it in 2020 and hope to be profitable by the end of 2020,” he added.

Ambitious Targets And IPO Dreams

For Droom, GMV is the value of each transaction that takes place on the platform. In terms of category wise share of revenue, the company says that B2C is roughly 85% and C2C is roughly 5% and B2B will be roughly 10% of the income. Further, the company sees 96% of its revenue coming from used vehicles while 4% from the new vehicles business. “Our transactional business is roughly 70% and financial services is 15% and advertising, pricing and certification is another 15%,” Aggarwal added.

The company claims that it has over $16 Bn of listed GMV and claims to have over 28 Mn in monthly traffic. Aggarwal said the company monetisation is 2.75% of the GMV for 2019, which it plans to scale to 3.25% by 2020-end and 3.75% by the end of 2021.

The trouble here is that Droom has always had ambitious targets. Aggarwal told us earlier that Droom was projecting $2 Bn in GMV and $55 Mn in net revenue next year, and $3.5bn in GMV and $120 Mn in net revenue by December 2020, which it said is the level that it would like to be at before going for the IPO.

However, the plans have changed. This may be attributed to the worst auto slowdown in years, which hugely impacted the industry in 2019.

“We had started investing roughly 15 months back in the new vehicles. And we had a sizable team for the new vehicle. We had to retrench that team and we had to cut the new vehicle sales.” — Aggarwal on the auto slowdown.

Aggarwal told us If the market was not bad, instead of $1.2 Bn in GMV, Droom would have done $1.6 Bn in GMV. He claimed the company suffered a $400 Mn in lost volume and decided to not chase revenue from the new vehicles category.

But beyond this, Aggarwal has roped in KPMG as an external auditor for the last five years and Grant Thornton as an internal auditor for the past year, in preparation for the IPO.

The long engagement with the auditors, Aggarwal said, is an essential step in the light of the recent plight of WeWork which has brought profitability of startups under the scanner.

WeWork had filed its draft papers for IPO in August 2019, but the prospectus made investors wary of the corporate governance and real estate management. After a lot of back and forth, the company’s founder and CEO Adam Neumann had to exit as SoftBank bailed out the company after value erosion.

The ripple effect of WeWork disaster is playing out now in the wave of layoffs on in SoftBank portfolio companies, which is being seen as a market correction.

What about Droom? It has raised over $125 Mn in funding and with the next round of funding, it’s on track to enter the unicorn club. Aggarwal said that Droom is looking to raise $150 Mn as its pre-IPO round, which would certainly take it to the unicorn club. Aggarwal said he feels the company is already near the unicorn club, but those losses must sting. How will the company cope with that and achieve growth quickly to get profitability and justify an IPO?

Whenever Droom does raise funding, Aggarwal indicated that the goal will not be to flood the market and buy growth. He said the culture at Droom is not to throw money at a problem but rather solve it fundamentally. “We don’t do capital expenditure, inventory risk or feet on the street, which has really helped us. ”

Aggarwal reiterated that the cost of going offline is high and real estate costs can be back-breaking. From tapping enterprise clients to dealership networks to broadening its fintech play and entering the luxury segment, Droom says it has big plans. But none of it involves entering the retail market.

As someone who grew a business to unicorn status with Shopclues, Aggarwal is keen to not repeat the things that went wrong with Shopclues, which was acquired last year by Qoo10. That means retaining board control, prioritising a low-cost approach and being measured in trying to achieve growth.

And of course, there’s the focus on solving problems with tech. “We try to solve every problem through technology. We have a bias. We think all of the world’s problems can be solved with technology.”

“We started in 2013. This was the time ecommerce was going pretty big. But customers were kept oblivious of the information about their orders or when it will arrive. FarEye was build to solve this gap.”

In the last six years, from a market positioning of a SaaS platform to a digital logistics company and finally, to a global predictive logistics platform, cofounder and CEO Kushal Nahata has brought FarEye a long way. What started as a simple platform to remove the information hurdle in logistics operations, it now leverages technologies such as ML, AI, IoT, gamification and analytics to empower enterprises. 

Today, FarEye claims to facilitate over 10 Mn transactions per day in over 20 countries for more than 150 customers. It offers comprehensive and predictive visibility of the supply chain to both shippers and carriers and helps them make data-driven intelligent decisions. After establishing the brand in APAC and Europe, FarEye has recently announced its plans to explore the US supply chain and logistics market as well. 

“Working and scaling with multiple clients like DHL, Blue Dart, Amway, Walmart and many others, helped us realise that a tracking solution is just the tip of the iceberg when it comes to solving the problems logistics industry was facing. There was a huge scope in optimising the entire process and we did exactly the same,” said Nahata.

Solving The Indian Logistics Puzzle

FarEye started its operations at a time when organisations were slow in digitising key supply chain and logistics processes. “Back then, logistics was perceived as a cost-centre rather than a brand differentiator like it is seen today,” recalled Nahata. 

Businesses were used to the traditional way of working. Embracing new technologies was not easy and this panned out to be a major challenge in the initial years. 

There was a need to tap the nucleus of all existing pain points and Nahata observed this during the initial research. He said that delivery is the first actual touch-point with the end-customer for a brand in an ecommerce landscape, making it so much more important than just taking the product to the user. He realised that with the right processes in place, deliveries could be taken from being just another task to a brand differentiator. 

“There is a great potential for businesses to generate new revenue streams from the logistics operations and provide delightful delivery experiences to end-customers. This further led us to build a workflow engine- a first in the industry that enables enterprises to reduce time to build new delivery processes from a quarter(s) to week(s) including testing and scaling,” Nahata told Inc42. 

Differentiation Through Service And Customisation

FarEye is an ML-based predictive logistics platform for businesses to execute, track, collaborate, predict and optimise the movement of goods. This helps businesses achieve sustainable growth, happier customers and higher margins.

FarEye’s platform is kind of a shape-shifter which can be easily customised based on customer challenges. The FarEye engine addresses the most exhaustive constraints that become a roadblock for transportation operations. Some of these include driver-route mapping, provisioning for pickup windows, delivery windows and no-entry time windows, tonnage, empty miles cost, running costs, waiting charges and more. 

Also, it reduces time to build new delivery processes from many months to weeks including testing and scaling. “With FarEye, businesses can go live in less than two weeks and that too with zero disruptions,” added Nahata.  

Currently, the startup has two products — FarEye Delivery for third-party logistics providers and FarEye Transportation for retailers and manufacturers. FarEye Delivery is a workflow-based vehicle routing and scheduling platform for fleet owners. Its key features include intelligent dispatch, cross-docking, pickup and returns, crowdsourcing, digital control towers and more.

On the other hand, FarEye Transportation is a predictive visibility platform that leverages machine learning and predictive technologies to eliminate delays, reduce risks and generate accurate ETAs. This helps manufacturers plan better for incoming deliveries, reliable transportation to reduce inventory costs and helps them benchmark transit times to reduce transportation cost.

The Rising Competition In Logistics Tech

While logistics tech grew on the back of the B2C boom, today B2B logistics tech startups have emerged as the darling of investors as they solve last-mile delivery, warehousing, freight, and supply chain optimisation. Apart from established names such as Shadowfax, BlackBuck, Delhivery, there is a brigade of new-age logistics tech players including the likes of like Fr8, Frieightwallan, LetsTransport and more.

However, logistics in India is a complex and fragmented industry. Despite having millions in the bank through funding and garnering significant consumer interest, some startups have failed to prove their mettle and as a result, had to shut operations. Back in 2016, six Indian logistics startups had to shut shop. Nahata believes a lot of leg-work and ground-level intelligence is needed before one builds an online logistics platform. 

As he said, diving deep into client issues and creating optimised and innovative solutions is the only way to sustain the business. “That’s why our R&D team is 65% of the total workforce with a healthy balance of experienced seniors and young working professionals. We try to build solutions that help millions of shipments to move on time with real-time visibility,” said Nahata.

For instance, FarEye’s go-to-market strategy had a mix of mass and niche marketing. “While we were present in all important events, we had a solid media strategy backing us up globally. Product is the hero in any SaaS organisation and we continue to devise our digital, content and branding strategy around it,” said Nahata.

FarEye: Eyeing The $160 Bn Opportunity

Estimated to have a market value of more than $160 Bn, India’s logistics industry is projected to hit $215 Bn in value in 2020, according to the finance ministry. ​It is one of the highest revenue-generating sectors in India​. However, the logistics cost as a percentage of India’s GDP stands at 14%.

“​That quantum in itself shows that if we look at it as an ancillary sector, we are probably spending a lot. And if you compare it with developed markets such as Germany and the USA, there you will see the spend is about 9-10% despite it being a large sector,” said Nahata.

​Nevertheless, the ​government​ aims to bring down this cost to less than 10% by 2022​. ​ ​As per a joint study by Assocham and Resurgent India​, the national exchequer can save a whopping $50 Bn if the cost of logistics and transportation is reduced from 14.4% of GDP to 9%. ​​ ​​

Nahata does not intend to miss this opportunity. Whether its scaling talent pool or exploring new geographies by opening offices to better support local demand, FarEye is looking at growth in every aspect. “Another key focus area is ensuring happy and engaged employees. At FarEye we believe that to ensure customer loyalty it’s important to keep our employees happy.”

The company is also looking to build up its tech capabilities by improving its machine learning algorithms for FarEye Transportation. To be future-ready, FarEye is also experimenting with drones and looking at blockchain integration. “We are positive about continuing to deliver value to manufacturers, ecommerce companies, retailers and 3PLs across the globe and empowering them in the times to come,” Nahata added.

Call it a colonial hangover or the aspiration to be part of the global dialogue, but Indians have always had a passion for English. In fact, Indian English is a recognised variation of the Queen’s English. And thanks to centuries of British colonial rule, Indian languages also lent a fair share of words to English. So India has had a strong influence on the way the language has evolved.

Even then, most Indians go to primary school taught in regional language or vernacular medium. After graduating through college and universities, these students often struggle to match up to their counterparts who have always been schooled in English. Thankfully, technology removes most barriers and gamification of learning and education has levelled the playing field in many ways and helped much of rural and semi-urban India catch up with the urban class.

These days, English is an indispensable language skill for Indians looking for jobs in the tech industry and the new-age economy. Beyond basic knowledge, employers are looking for modern communication, presentation, negotiation, and interpersonal skills. This extends to many gig economy jobs in the consumer services sector as well and in the retail market too.

To a population obsessed with being fluent in English, the lack of access to learning the language is a big impediment, and dodgy ‘coaching classes’ abound. This was realised by Arshan Vakil when he was working at an ecommerce startup in Mumbai which was helping underserved young workers get mentorship and advance career opportunities.

“English is inherently linked to most career opportunities in the formal sector yet there is a huge lack of access to English training across the country. So we started enguru with the aim to bridge the workplace English gap that unfairly hampers the majority of Indian’s career aspirations,” the founder of edtech startup Kings Learning, which runs the Enguru app told Inc42.

Reports state that English is the primary language—mother tongue—of 256K Indians, the second language of 83 Mn people, and the third language of another 46 Mn people in India, making it the second-most widely spoken language after Hindi as per the 2011 Census.

Focusing on English speaking, enguru uses a combination of self-learning modules as well as live classes for English learning users. Launched in 2014, the enguru app enables users to learn English through interactive games and conversations.

Thanks to proprietary artificial intelligence (AI) algorithms, the app personalises the experience for each user, which happens in two ways. Firstly, enguru understands the responses from each user and accordingly frames the questions in the self-learning mode. Then it also helps a user understand where they went wrong with the pronunciation through a simulated conversation mode. The live class segment is activity-based where users practise speaking with each other through job-focused scenarios.

Gamifying The Learning Methodology

With English being a common language and plenty of free online courses to avail, learners are spoiled for choice. So generating revenue from a model like enguru’s would be a challenge, but Vakil believes in taking it one step at a time.

“We launched live classes as our first paid feature in September 2019. Live classes are purchased using enguru coins which can be earned by completing app levels or purchased directly. We have seen an MoM growth of 108% to reach over 32K monthly sessions.”

Besides, the consumer-facing offering, enguru also partners with businesses in the retail, hospitality, banking, financial services, and skill development sector. “These partnerships include training workforces on a quarterly subscription basis in addition to helping build our consumer brand. Our partners include Tata Trent (Retail), Oberoi Hotels, Magic Bus, and NSDC,” Vakil added.

The English learning app startup has raised a total of $2.5 Mn from the Michael & Susan Dell Foundation, while other investors include Village Capital and Weihua Yan. The round was raised in 2017.

Founded in 2014, Kings Learning claims enguru was the first third-party app to be launched on the JioPhone feature phone platform, where it claims to have got over 120K downloads on the first day and over 25 Mn downloads in under two years. Across its apps, the company claims to have 32 Mn users. Vakil told Inc42 that the recently launched live class feature offers activity-based classes where users practise speaking with each other through job-focused scenarios. “With an MoM growth of 250%, we’re at 1500 daily live user sessions,” he added.

In terms of its target audience, enguru focuses on young adults and working professionals in the age group of 16 to 30 years. Vakil said individuals that are going to enter the workforce or have recently started working are realising the importance of English in progressing at the jobs.

“Our audience has mostly studied in local medium schools while growing up but not always.”

Vakil added that classes that are targeting those from a vernacular background, as well as live classes, have made enguru popular among students.

Fighting Off Competition In Language Learning Segment

For the year ahead, enguru plans to start live classes offered by the platform and its B2C strategy would be the key focus. Vakil said that the increasing demand for tech-enabled learning solutions can be gauged by the fact that more than 3,500 edtech startups were operating in India.

A KPMG report on the edtech sector in 2017 predicted that India will have 9.6 Mn users paying for online education by 2021 and a market value of approximately $132.98 Bn by 2023. Vakil says these are conservative estimates and believes that the edtech sector in India will grow even faster, as more models are launched.

With those numbers in place, the presence and prominence of the edtech sector in India are expected. While it may seem that online learning in India is fairly new, enguru is not the first in the AI-enabled online learning space.

Indian online language learning apps like Hello English and HinKhoj, as well as international counterparts such as Duolingo have added to the competition in this space. Many have been here for much longer than enguru. Additionally, the likes of Pune-based Utter with over 3 Mn downloads have come up as newer rivals for enguru. So naturally, penetrating this competitive market comes with its set of challenges around customer loyalty, acquisition, UI/UX as well as feature building.

Vakil believes that digital innovation is disrupting traditional education and widening access to quality education while promoting richer outcomes and higher engagement. He welcomed the competition as it’s increasing the relevance of edtech in the consumer market.

“With the rise of edtech companies, video-based content and live learning portals, online learning is complementing traditional, classroom-based learning,” Vakil told us.

He believes that e-learning platforms need to work collaboratively with traditional teaching models. Tech platforms will help teachers and facilitators provide a more comprehensive learning experience by tracking student progress. And going ahead Kings Learning and enguru will continue betting on personalised and gamified self-learning journeys to keep learners engaged and outcomes measurable.

The impact of automation and artificial intelligence can be felt across sectors — Flipkart’s  logistics operations have been accelerated through the use of automated vehicles, Facebook is using AI to moderate content, and Google has built AI models to predict lung cancer risks, among several other open-source AI tools and applications. 

This rapid pace of automation has intensified the need for skilling and reskilling of the workforce in deeptech technologies. For every 10 new jobs created by artificial intelligence, at least 100 jobs are being made obsolete. These days, the most attractive fields for tech professionals are machine learning, AI, robotics and deeptech. 

Reports even predict that 65% of children entering primary school today will ultimately end up working in completely new job types that do not even exist yet. Karan Bajaj, CEO of WhiteHat Jr, believes that artificial intelligence will impact 800 Mn jobs in 2020. 

“Basically, any job that doesn’t involve creation will be automated.”

So, how do we prepare young children for this unpredictable future of work?

Mumbai-based WhiteHat Jr is looking to solve this unpredictability by teaching coding principles and basic to kids as young as six-year-olds. Targetting kids in the age range of 6-14 years, the startup has created a coding curriculum including programming for AI, robotics, machine learning and space technology. All of WhiteHat Jr classes are taught online by a certified tutor working from home. Tutors are paid for each class they successfully complete and the average monthly income is said to be around INR 50K.

Prepping For The Future Jobs, Right From Kindergarten

“We want kids to go through this fundamental shift in their thinking and view themselves as creators, so they become entrepreneurs or artists in the future,” said WhiteHat Jr’s Bajaj.

He added that kids today learn the basics of computing in schools but there needs to be a more comprehensive approach to teaching them coding as one of the key skills of the future. Talking of other benefits of teaching coding to kids, Bajaj said that coding also helps kids improve their logical and analytical thinking and increases creativity and concentration – all of which are skills that can be applied far beyond the realm of computer science.

Founded in 2018, WhiteHat Jr claims to have about 8K enrolled students, participating in 5K classes per day conducted by 800 tutors. The Nexus Ventures-backed startup claims to have $15 Mn in annual recurring revenue and a monthly growth rate of 50%. 

Bajaj told us that about 55% of WhiteHat Jr student base is from metros and Tier 1 cities, while the rest 45% come from Tier 2 and Tier 3 cities such as Balangir, Nagpur, Ahmedabad and others. The company claims to be acquiring a major portion of its customers through referrals and word of mouth publicity.  The customer repeat rate of WhiteHat Jr is said to be over 85%.

For now, the company measures the impact of its classes in terms of Android apps created by WhiteHat Jr students and learners. For example, a six-year-old kid is said to have developed a sign language app for the hearing-impaired, and the company claims an eight-year-old created a 24×7 school communication channel similar to Slack for parents, students and school teachers. 

Taking Its Coding Curriculum To Schools 

Beyond bringing live classes to learners at home, WhiteHat Jr is working to bring its AI and robotics coding curriculum to schools across the country. It is also working on a coding curriculum for kids over 14, which is expected to be launched in the next few months.  

“While schools are doing their bit in using technology to enable learning for students, we believe that there’s an opportunity for them to work with specialised players like us to introduce emerging technologies like AI, robotics, machine learning, and space tech into their learning models,” said Bajaj. 

In India, Bajaj estimated the company’s target market size to be around $25 Mn, with about 9 Mn kids in 6-14 age group with access to internet broadband. WhitHat Jr is also looking beyond the Indian market and has plans to expand into Southeast Asia and North America, but here it will be faced with increased competition from private players as well as the schooling system.  

Is WhiteHat Jr Ahead Of Its Time? 

At a time when India is the most depressed country in the world, is it okay to introduce six-year-olds to deeptech education and pile on pressure? Psychological concerns such as behavioural issues and suicides are on the rise among Indian students. National Crime Records Bureau statistics show that one student commits suicide every hour in India due to the pressure of performance. 

Are we headed towards a world with vocabulary flashcards for toddlers and coaching classes before walking? 

To which, Bajaj said, “As a father of two daughters, I believe in the incredible power of early childhood learning and wanted to harness the creativity that most five or six-year-olds naturally have. At a young age, the power to grasp and understand any subject or activity is higher than at a later stage in our lives.”

Every year in India, more than 3.25 Mn new cars and 20 Mn new two-wheelers are sold, of which more than 60% are financed or bought on loans. Yet, loan processes are tedious and not exactly consumer-friendly.

While financing organisations claim paperless and digitised processes, anyone who has bought or sold cars knows the reality of lengthy paperwork involving multiple documentation and the back-and-forth with many agencies. Vehicle loans typically take 3-5 days to be approved. But what if there was a way to get new cars/bikes without paying the full amount and without taking a loan? Mumbai-based OTO Capital says vehicle leasing is that alternative.

OTO, apart from the obvious reference to “auto”, also stands for ‘Owning Together’. Offering an alternative model to bank financing for vehicle ownership in India, OTO has introduced an option to take two-wheelers or four-wheelers on leases, in association with partner banks.

Although, there are older companies that provide this kind of financing model, only for four-wheelers and that too only to corporates and none of them is operating in the two-wheeler segment and there’s no focus on individual consumers.

From his own experience of dealing with two-wheeler buyers at his previous startup CredR, OTO cofounder and CEO Sumit Chhazed realised that the consumer mindset has now changed where more and more consumers are opting for finance and upgrading their vehicles much faster — almost every three years compared to every five years for older generations.

There’s a great need to solve the hassle of applying for finance for this audience, take responsibility to maintain the vehicle and put the effort of resale each time by themselves.

“Most of the car and bike buyers are in the age group of 21-35 who are young, progressive and aspirational. They believe in owning what they desire and not what they can afford along with the minimum commitment. The main problem we are trying to solve is the unavailability of flexible and affordable ownership models for the Indian auto consumer,” Chhazed told Inc42.

How Does Vehicle Leasing Work?

OTO’s instant-approval model allows customers to choose the desired vehicle from the partnered showrooms. At present, OTO Capital’s primary focus is on two-wheelers and it has partners such as Hero, Bajaj, Honda, Yamaha, Suzuki, TVS, Royal Enfield among others.

OTO’s proprietary algorithms generate a true score basis various personal and income parameters of the applicants which helps in instant approval. The team has also digitised the complete journey for the customer from inquiry to application and agreement closure. All this requires zero paperwork, OTO claims.

Buyers can make a down payment of INR 5000 and sign up for all-inclusive EMI offers that include vehicle insurance and maintenance costs. At the end of the chosen tenure, users have the flexibility to walk away with no obligation, or lease a brand new bike or make a simple balloon payment to retain the same bike. In case, a user wants to reduce the tenure, they can do so by paying a nominal prepayment penalty fee.

The process is similar for leasing four-wheelers, with the exception of the down payment amount, which varies for category and size.

Here’s a breakup of the instalments and how far vehicle leasing deviates from a typical bank loan on a yearly basis.

The vehicles are issued in the owner’s name and are returned to OTO after the selected tenure of 1-3 years. This allows the user to avoid paying EMIs on complete asset value as in the case of conventional loans from banks and other financing institutions.

The monthly OMI (OTO monthly instalment) payments are also flexible and can be personalised as per the monthly budget of the user. The company further claims a 30-minute loan approval, up to 30% lower monthly cost and assurance of a vehicle change within 1-3 years.

Hurdling The Bumps In The Growth Path

At CredR, Chhazed worked closely with the second-hand two-wheeler market. However, there were new challenges with OTO, as he was working on a completely new product.

“The concept of automotive leasing or flexible financing was not known to most vehicle buyers or dealers when we started. We had to visit many dealerships and showrooms to introduce our product to them. We need to speak to customers, understand their concern and reiterate our product pitch for the first 50 customers multiple times,” he said.

Talking about competition from traditional lenders, Chhazed called them “stone-age financing options” hinting at how OTO is differentiating through tech.

But he is right about calling them serious competition. According to a November 2018 Money Control report, NBFCs have up to 40% share in the two-wheeler financing market. Finance arms of companies like Bajaj Auto (Bajaj Finance), Hero Motocorp (Hero Fincorp), and TVS Motor Company are pulling in significant sales for their companies. In the banking space, HDFC is the primary player owning the majority market share in two-wheeler financing space.

OTO Capital is now planning to focus on penetrating deeper in the Indian market for the next 18 months and create its dominance in 10 cities. The company claims to be adding 150+ new customers monthly now and aiming to achieve 1000+ monthly transactions by mid-2020. It also claims to have disbursed vehicles finances worth $2 Mn till now.

Chhazed said the target in the future is to focus on spreading awareness about individual vehicle leasing options in the market to gain customers organically.

“In the West, auto leasing is the first option that is given to all buyers while in India it has been still limited to larger corporations and its employees. Customers in India are not aware of such options hence educating the consumers is really important.”

Every revolution and phase of industrial development brings in a new set of issues and challenges for the world. With the bronze and iron age, mining for ore steadily depleted natural resources in many places around the world, while the industrial revolution of the late 19th century increased water and air pollution to a large extent. These challenges for the environment, which continue to plague the developing world, are some of the biggest concerns today in the face of climate change and global warming. While the contribution of the industrial sector to India’s GDP has gone up over the decades, it has also given rise to a multitude of health issues and lifestyle diseases.

Today, every year, more than 9 Mn people across the world succumb to air pollution-related illnesses. Every day, more than 1700 children under the age of five are said to die because of unhealthy air quality. The World Health Organization states that air pollution is the single biggest environmental health risk that we face. Living in a polluted city like Delhi can reduce one’s life expectancy by at least nine years, research says, and is equivalent to smoking dozens of packets of cigarettes a day. The worst part is that heavy metal pollution often leaves a permanent impact on health — even when the air quality improves, heavy metal toxicity can continue to harm individuals. The air quality index in most Indian cities is above the indicated healthy range, even on so-called good days. So what can be done to solve this?

While there is some work being done to take action against rising air pollution, the fact is that there has been an increased focus on cleantech startups that are using data to combat pollution. India’s cleantech industry is becoming more coherent by the day and investments are pouring in in huge amounts.

Ambee, the Bengaluru-based environment intelligence startup, is also leveraging data and predictive analytics to measure hyperlocal air quality data in real-time and provide insights to customers. Founded in 2017 by Madhusudan Anand, Akshay Joshi and Jaideep Singh Bachher, Ambee was started with an aim to create an environmentally-informed society by providing access to data and tools that tackle rising air pollution.

For Ambee, the journey started from a deeply personal place. Anand built the first working model for his own infant son, who was seriously ill. Doctors were unable to explain why the child was wheezing and unable to breathe until he collected hyperlocal air quality data and modelled it. In his quest to understand more about the problem, he started monitoring air quality in and around his residential community.

That’s when he found that the levels of particulate matter (PM2.5) near his house were touching dangerous levels of 800 ug/m3. This led to awareness in the neighbourhood and amongst local paediatricians. At this point, he realised the need to implement this solution on a much larger scale.

“We gave up our jobs and decided this was a pressing need and possibly a large market,” Akshay Joshi, CEO and cofounder, Ambee told Inc42.

Choosing Data Over Hardware

While the cause and the enthusiasm of the founders is commendable, like anyone starting out the founders had several challenges ahead, particularly from a business model point of view. An early challenge was whether to go down a hardware path or avoid it and focus on data. The founders felt that while a hardware product will see early sales, this tends to plateau quickly and poses problems of scale, supply chain, manufacturing and defensibility.

“We switched to a data play and that’s when the interest from investors went up significantly. Our team continues to be heavily tech-oriented, and has always been lean, we’re all hungry and everybody is an oversize contributor,” he added.

Setting up sensors to collect air quality data and its maintenance is an expensive affair. According to the World Health Organisation, one air quality sensor should be installed for every square kilometre. To address the cost problem, Ambee used a multimodal approach. In addition to data gathered from government sensors, IoT devices and open source geological and meteorological data, it uses satellite imagery and human indicators such as population and garbage burning. Together, these factors help Ambee create a full picture of air pollution around a neighbourhood or locality.

Ambee measures a number of air quality parameters and pollutants, including those that are considered by multiple government agencies for air quality index (AQI) measurements. Ambee’s multimodal approach and its array of sensors measure air quality, particulate matter, volatile organic compounds, temperature, humidity, and other environmental factors.

“Our aim is to build large-scale data models, which bring air quality information down to a granular level in real-time,” Joshi said.

On a postcode level, the solution covers multiple countries around the world — Ambee has installed 100 sensors across Bengaluru with over 500 sensors currently being installed in other cities India.

“We have air quality data for over 1 lakh pin codes across 65 countries. We are in the process of mapping major Indian cities at a street level.”

Besides health researchers, Ambee’s data is accessible for free through websites and through a mobile app. The team works with multiple agencies, including those that use AI and data for large-scale social good. Ambee also launched a website that provides a quick overview of real-time air quality information. It is also able to focus on accuracy as it has kept costs under control using the multiple data points to arrive at more accurate readings. It has also implemented multiple redundancies and failsafes to make sure that the data presented is not loaded.

Ambee Catches The Rising Wave Of Investor Interest

In India, investor capital goes a long way towards bringing new ideas to market. This is perhaps truer for the cleantech space than other sectors, given the development here is still nascent.

Investors entering this field are aware of the longer development cycle and go-to-market curves, compared to say fintech or consumer services, but are also counting on the larger impact — often global in scale.

“It is a heartening sign to see investor interest in this field. The present issues with the environment make it obvious that we are living through a critical phase,” Joshi added.

With air pollution being the world’s biggest health and environmental threat, according to the WHO, Ambee says anything that “even moves the needle on this massive issue” is welcome, but it’s also not expanding to any other categories on the vast cleantech canvas.

So far, Ambee has raised funding from angel investors in India. “We sought out people who understand the scale of this problem, how it is actually affecting this generation and future ones, and how we’re looking to solve it,” Joshi added.

The startup has investors including Sequoia India MD Rajan Anandan, Google Pay’s Ambarish Kenghe, the Wadia Group’s Dina Wadia, Kalpataru Limited commercial director Anuj Munot on board. Venture Catalyst and Techstars are active early-stage investors.

Overcoming Minor Hurdles For A Major Cause

Environmental intelligence is, however, a challenging field with a greater emphasis on data accuracy. The accuracy and reliability of the information have implications for healthcare, public policy and overall improvement of life worldwide. In this light, Ambee and other startups say that competition often takes a backseat and the goal is to improve the understanding of other players as well and make a difference.

“The need for emergency warnings is quite high across the globe, with different administrations and customers specifying various thresholds and parameters.”

Pollution is now a big issue worldwide and awareness is definitely on the rise in countries where the situation is worsening each year. “Being a big issue also means it gets politicised across the spectrum. Just the fact that major world leaders have been unable to reach a consensus on the Paris Agreement shows how deep-rooted the issues are,” Joshi added.

Joshi also bemoaned the lack of understanding even among those who have received the right education in these matters.

“The basic idea is that even a small delta in pollution, like between various neighbourhoods in New Delhi, can affect life and health. But there is no accurate data to measure anything, including the efficacy of solutions,” Joshi said.

Besides its consumer apps, Ambee also works with a combination of large and small enterprises across the world to provide the same air quality data for business actions. It expects to ramp up the B2B model in the next 24 months.

It also claims to have significant inbound interest from international investors who understand the problem and see value in its capabilities.

“At this stage, the quantum of capital is less important than the pedigree of the investor. A great investor, to my mind, is someone who opens their entire network and actively grows companies in their portfolio. Working with such investors will significantly help us accelerate growth.”

“While I was in PayU and Citrus we had to deal with a lot of small businesses. That’s when I realised that these businesses were facing a lot of challenges when it comes to managing their finances,” – Anish Achuthan, cofounder and CEO, Open. 

Open claims to be Asia’s first neobanking platform and is working to bring digital banking solutions to small and medium businesses and startups.

With over 50 Mn SMEs operating out of India, the space that Open works in offers a huge opportunity. Traditional banks are generally not able to provide the value-added services to this large base of customers due to their legacy structure.

From using a traditional bank where the money is held, a separate tool for accounting, a payment gateway for payments and reconciliation and different software for invoicing, businesses today are dealing with disparate elements in their operations. As a result, finance teams and banks end up spending a lot of time in reconciliation and process-making.

“With this in mind we decided to build a platform which could integrate everything from banking to automated accounting in one place,” added Achuthan.

Founded by serial entrepreneurs Anish Achuthan, Mabel Chacko and Ajeesh Achuthan along with former TaxiForSure CFO Deena Jacob in 2017, Open is a neobanking platform that does not have a banking license but partners with traditional banks to offer value-added services to SMEs and direct consumers.

Open: Services Offered, USP And More

The SME-focused neobanking company offers tools for businesses to send and receive payments combined with automated accounting and bookkeeping, expense management and developer-friendly APIs to help SMEs integrate banking into their business workflows in minutes.

Recently, the company announced a partnership with Visa to launch the ‘Founders Card’, a business credit card that will enable startups and SMEs to seamlessly manage expenses and vendor payouts.

Open is working under Visa’s Fast Track programme for the India market which supports homegrown startups and helps businesses automate payments.

Besides helping SMBs manage payments and reconciliation and solving access to working capital, Open also supports critical tasks such as GST and tax filing, which have become a big compliance hurdle for SMBs in the past year or so.

Challenges Of Bringing A New Concept In Indian Ecosystem

In countries like the UK, US, China, Argentina, Europe, Brazil, Australia, fully operational neobanks have become commonplace. But due to regulatory hurdles, neobanks can not function in India directly and have to work as a platform along with partner banks.

“With Open, for almost the first one and a half year, we struggled to find the right banking partner who would help us leverage its base to build upon. It took us a lot of time to go through all the statutory permissions and requirements. We only partnered with ICICI Bank in October 2018,” said Achuthan.

But as they say, all’s well that ends well. Backed by leading global investors like Tiger Global, Speedinvest, Beenext, Recruit Strategic Partners, AngelList, 3one4 Capital, Unicorn India Ventures, Tanglin Venture Partner Advisors among others and has raised $37 Mn in funding so far.

Today, it has already grown to have over 350K SME customers and claims to process over $10 Bn in annualised transactions. The monetisation model includes pay per use charges, subscription fees for premium services and revenue share on apps on its app store. Open told us it adds over 35K SMEs every month, and now has 17 partner banks on board.

The Way Ahead For Open And Neobanking In India

Bill Gates once said: ‘Banking is necessary. Banks are not.’

The rise of neobanks globally is lending credence to Gates’ words. In fact, a Medici report revealed that in 2018, the neobanking market accounted for about $18.6 Bn in revenue, which is expected to see a herculean growth at a CAGR of 46.5% in the coming years.

The global neobanking market size is expected to grow up to $394 Bn by 2026, at a CAGR of around 46.5% between 2019 and 2026. This is further backed by the fact that European neo-banking players like Revolut, N26, Monzo have become unicorns in just a few months since launch.

And though the neobanking as a concept is new for India, there is no dearth of players in this segment. Namaste Credit, NiYO, SBI YONO, Kotak 811, Hylo, PayZello, InstaDApp, 0.5Bn FinHealth (YeLo), Forex-Kart, Walrus, Epifi, Neo-Bank, Amica, Fin.in, RazorPay X among others have already been gaining significant attention from consumers, industry and investors.

Going ahead, Open aims to bring one million SMEs on the platform by September 2020. The major concern for Achuthan and the team revolve around the regulatory aspects which are taken care of by the partner banks. But he seems optimistic and does see the regulator coming up with a digital banking or neobanking license in the near future, in line with what’s happening in Singapore, UK, Malaysia and Hong Kong.

“We have seen this earlier too with the payment banks license. In many ways, we have a very proactive regulator that keeps a keen watch on what’s happening in the global markets and adopting the best practices into the Indian use case,” he added.

Be it Zoho, FusionCharts, Appointy or Wingify, there have been plenty of examples of SaaS startups bootstrapping their way in the Indian market. Of course, as with any other bootstrapped startup, the sense of independence that comes with having your own business, not caring about exits but focussing on growth, is liberating for founders. And in the case of the software-as-a-service industry, the success of the bootstrapped startups is a source of inspiration for new ventures.

The overall SaaS industry in India is estimated to have a market value close to $1 Bn, with a CAGR of 36%. And with enterprise tech startups Druva and Icertis making it to the unicorn club in 2019, it is not surprising to hear that the Indian market presents incredible opportunities for enterprise tech startups. Given India’s strengths in software development, SaaS startups have also been able to find ready buyers for their products in the global market.

But the first few years for any SaaS product is finding the right audience, the balance of features and agility and getting feedback from users or testers. And of course, there’s the question of how to attract funding to go after the big clients.

What Product Hunt does for web and digital products and services, PitchGround is attempting to replicate for the SaaS sector in India. In fact, PitchGround is taking it a step further as it is a SaaS company helping other SaaS companies raise quick capital without losing equity, getting early adopters and customers as well as feedback on improving the product.

Founded in 2018 and a bootstrapped startup itself, PitchGround claims to be profitable since day one and is helping other SaaS companies with the same goal.

“Compared to being funded, bootstrapping requires resourcefulness. Founders need to find unique and original ways of funding their growth/product. Yes, you grow slower but you maintain 100% freedom and independence,” – Udit Goenka, founder, PitchGround.

PitchGround: Growth As A Service for SaaS Startups

Three years ago, Goenka was trying to solve the pain points for salespeople with an application called FunnelBake. When it was time to launch the product, he hired a consultant to bring early adopters for the app. Unfortunately, the consultant’s advice did not bring in the results, but Goenka still had to pay them for the service.

This experience led him to dive deeper into the problems of launching a SaaS product—he met other SaaS startup founders who suffered the same fate as him at launch. This became the origin point for PitchGround.

“We are one of the fastest-growing SaaS marketplace and crowdfunding platforms. Our aim is to connect early-stage SaaS companies with early adopters and customers who are hungry to try out new products.”

What sets PitchGround apart from the competition is the education-first approach. “We provide a crazy amount of content to educate our audience about not only the product but also about the whole topic. We do webinars, record videos, interview founders and more,” added Goenka.

The founder told us that PitchGround is founder-focussed, which means that it has conversations with founders using the platform regularly to discuss new ideas, approaches and more. Businesses can also see how many users they have gained through PitchGround on a dashboard along with tracking usage and feedback.

Before working with any client, the team at PitchGround internally assesses the SaaS product, to understand whether it will be able to handle the increased traffic after it debuts on the platform, whether the startup has enough resources, team members and more. With actionable tips, PitchGround then helps startups improve their offerings by improvements in UI/UX, tech, customer flow and more.

Once the product is ready, PitchGround then structures a Lifetime Deal campaign, which is a special offering where customers pay once instead of monthly or annually. “Deals are often time-limited to just a couple of weeks which incentivises customers to take action. For a SaaS company, it means a huge influx of cash in a short time frame. Usually in the range of an average seed funding.” Goenka told Inc42.

PitchGround works on a revenue-sharing model with startups. This helps SaaS startups by giving them the strength of an enterprise-grade marketing team without paying a single cent upfront, explained Goenka. He gave us the example of MarketPlan.io, which raised more than $83K in just 21 days on PitchGround.

The startup not only helps SaaS startups gain early adopters but also helps them get feedback from users to modify and improve their products.

“Another success story would be of a company called ReThink (rebranded from Publist) which leveraged our platform to acquire as much user feedback as they could. Thanks to that, ReThink was able to secure multi-million dollar funding to massively boost their growth,” Goenka claimed.

Overall, PitchGround claims to have supported over 27 SaaS startups and helped them earn $1.6 Mn collectively in revenue.

The Journey Ahead For PitchGround

For any enterprise tech startup, a strong network of business partners is crucial for growth and scaling. This is especially true in the SaaS space as it helps build product credibility through real users. Claiming to have a network of over 50K B2B partners through ads, email lists and more, PitchGround is providing users with an easy way of attracting early adopters.

“We also run ads on multiple platforms, such as Facebook, Instagram, Google and more. On top of that, we have collaborated with influencers from the online marketing industry,” added Goenka.

While building PitchGround, one of the biggest challenges was to get transactions flowing in the first three months of their operations. That is when Goenka and his team decided to go with the approach of building a community of early adopters, which led to the growth that PitchGround could use to scale further.

As startups, PitchGround also had a hard time building a team to complement its operations. Being a huge admirer of ConvertKit founder, Nathan Barry, who built a company with 39 remote employees, Goenka also decided to start PitchGround as a company with remote workers.

Operating in multiple cities, the team of PitchGround is 100% remote making for a unique company culture.

Goenka revealed that Indian founders were the top earners through PitchGround and also had the most number of launches.

While talking about the future plans for the startup, Goenka said, “When it comes to the product and the scope of the activities we do, we want to widen our area of interest and add more unique, tech solutions. And we’re already building these things in the background and later in 2020 and 2021 we will start revealing them.”

When Joy Lobo strummed a guitar in 3 Idiots singing the much-loved Give Me Some Sunshine or when later in the same movie, Aamir Khan’s protagonist Rancho talked about the mental pressure on students in India, almost everyone in the audience felt a connection. The pressure to achieve good grades and joining the race for higher education is keenly felt by anyone who has come through the Indian school system. And thanks to this hypercompetitive atmosphere, Indian cities are dotted with coaching classes, tuition centres and institutions of varying repute.

Born out of the massive competition for the limited seats in premier colleges and universities, coaching classes have become something of an institution by themselves. Fuelled in equal parts by fear and by the desire for success, coaching classes spread across Indian cities like wildfire.

Moving to 2020, the education sector in India adapted itself and accepted technology with open arms, but coaching classes have remained somewhat immune to the march of tech. But bringing coaching classes to the digital present is where Mukul Rustagi and Bhaswat Agarwal want to carve a niche. The duo met each other during their IITJEE coaching days back in 2007 and the vision for their startup Classplus stems largely from this experience.

When their coaching centre shut operations 10 months before the exam date, Rustagi and Agarwal realised the need to assist educational SMBs and coaching centres with mobile technology to solve the potential pain point for students and parents.

Founded in 2018, Classplus claims to work with more than 3000 tutors across 50+ cities in India and is enabling these classes to manage the operations with greater ease and allowing them to offer customised lessons to students digitally. The coaching management solution helps classes digitise student performance records and fee payments. For students, Classplus enables online tests, lessons and multimedia educational content. It charges coaching centres an annual subscription fee, which unlocks the full suite of features.

Classplus is not the only startup to look for success with this model. Competitors such as Proctur and Classpro came on to the scene later, and also offer similar solutions for coaching classes.

Classplus cofounder Rustagi told Inc42 that over the past decade, it has seen a lot of changes in the education market. “The early days were chaotic, to say the least as there was no national brand that had been able to inspire enough trust within the tutors and give them the optimum experience. The market was flushed with local ERPs which couldn’t deliver what they promised. Tutors were keen to leverage technology to upscale their operations while students had started realising the utility of using the internet as a productivity tool.”

But around the middle of the previous decade, edtech startups began sprouting up with great regularity. The parallel increase in the number of online educational platforms and the audience for them meant rapid growth for learner-facing edtech offerings. The socio-economic disparity within the country also plays a huge role in the success of online education platforms in India. While metro cities have the right facilities and expert teachers, most Tier 2 and Tier 3 cities in India lack the right teaching talent and management expertise. This is where a student feels more inclined to opt for an online medium which also provides them with the flexibility to learn at a time convenient to him.

The fact that India sees over 70 Mn students opting for entrance exam training every year, of which about 98% opt for coaching centres, gives Classplus a big market. Cofounder Rustagi told us that a majority of the coaching classes have an offline infrastructure, highlighting scale-up challenges as well as an inability to ensure a seamless post-classroom engagement with their students and parents. This is making them look forward to technology in assisting them to run their daily tasks and administration.

Rustagi believes, “We don’t imagine technology to replace tutors in India but however see it as a collaborative trend going forward. In our view, traditional tutoring set-ups, armed with local trust and modern-age technology can jointly foster the future of the Indian e-learning market.”

So far the company has raised $4 Mn from Sequoia Capital India having been through the Surge accelerator programme, Blume Ventures and Times Internet. Strive and Spiral ventures from Japan also participated in the venture’s seed round. Kunal Shah, Alvin Tse, and Eric Kwan are some of the prominent angels with Classplus. “We feel fortunate how our investors have often guided on GTMs, product and team building,” Rustagi added.

An online platform as a coaching management software is not new to India. Established competitors in this business include Proctur, Smartclasses.in, eduZilla, SkoolApp among others. Where Classplus makes a difference is that it not only caters to the B2B space as a coaching management software but also as an online learning platform for the B2C space. It also acts as a digital distribution platform for educational content and products, enabling tutors to set up e-commerce channels that double up as their content repositories to share video content and online assessments with students.

In a recent survey, it was found that the two biggest reasons for preferring live and interactive classes were instant doubt resolution and better planning through a day-wise study plan.

While it is certain that with the coming times, education will be imparted with a great deal of technology involved, the fact that it will overtake the conventional classroom is debatable. Aspects such as collaborative learning, team building, class participation, and a teacher-student relationship take a backseat when it comes to online learning. These factors tend to play an important role in the overall enhancement of a child’s personality.

Key challenges for a business always present scope of growth for the company in that direction. For Classplus, Rustagi believes that as the company scales rapidly, the challenge of hiring quickly while maintaining the highest standard of talent is a critical issue. “It is imperative to keep the flag of culture high as we grow,” he added.

On the current state of India’s edtech market Rustagi told Inc42, “Compared to global counterparts, the Indian e-learning market is still in very early stages. However, we expect it to increase exponentially with increasing internet and smartphone penetration as most of the educational content is being consumed on smartphones. Also with the advent of digital distribution channels, we expect the barriers of cost and access to decline in the near future.”

While on our six-city tour of the Tier 2 startup ecosystem with BIGShift, we discovered several promising startups. This series will cover some of the most innovative startups. From this series is a startup from Ahmedabad, Reelo that is helping offline businesses in the country with its SaaS approach to acquire, retain and engage with the customers.

In Ahmedabad, the sons of a small retail business owner were troubled by how fickle their father’s business was — relying as it did on the whims of the customers. Although the products were well received, their father, like many other entrepreneurs, wouldn’t know when the next customer would come into the store, or what it will take to bring them back. Realising that this is not an isolated case but rather a significant problem to be solved, Parin and Prit Sanghvi decided to make a difference, and thereby also put their business acumen to the test. And thus came Reelo.

“There are over 14 Mn small and medium businesses (SMBs) and MSMEs in India who are still unorganized and run traditionally. The customer experiences at these businesses have not changed for decades. They don’t know who you are when you walk into the store and have no ways of inviting you back. Basically, business is left up to chance most of the time,” – Parin Sanghvi, founder, Reelo.

Reelo offers a simple and affordable solution to the problem of building customer awareness around retail products. The brothers set up Reelo in 2017 — recalling the initial days, Parin told Inc42, “We realised that we could use tech to help solve the problem for all these SMB retailers and add value to millions of retailers in India.”

Not only is Reelo helping businesses create customised digital loyalty programmes, but also communicate and build a two-way consumer-to-brand relationship. “Our team helps the merchant in setting up customer-oriented rewards when they partner with our loyalty programme. They can choose from a variety of options, based on their requirements and the relevant target market,” Parin told Inc42.

Discovered during the Ahmedabad leg of the six-city Inc42 BIGShift tour, Reelo has grown from a boutique company which started in Ahmedabad with around 70 businesses to now having a presence in 24 cities. “We have over 1,600 businesses using our platform and have engaged over 3Mn users,” Parin told Inc42.

How Reelo Is Getting Customers To Return

Deviating from the more commonplace ‘shared loyalty programmes’ where brands join together in a partnership and offer rewards under one common branding, Reelo focusses on each client individually and as per its target audience.

“We have built a platform and app to run loyalty marketing programmes and shopping analytics for SMBs. What started out as a basic rewards and loyalty programme, has now grown into a larger marketing and analytics platform over the past year,” Parin pointed out.

Utilising the power of big data, predictive analytics and cloud-based marketing automation for personalisation, Reelo also claims to have made offline transactions as personalised as they are online with their low-tech software platform at the merchant point of sale or PoS.

These insights help Reelosends highly targeted campaigns to consumers with the aim of retaining their business and measure the returns on marketing investments. “We not only solve the need to increase continuous footfalls but also monitor problematic areas and thereafter provide effective solutions to rectify the same, all at the fingertips of the merchant in single clicks,” said Parin.

With Reelo, retailers are able to identify and track customer behaviour such as spending power and purchase behaviours, in order to serve them better once they step into the premises. By identifying their loyal customers, merchants can run specific campaigns focussed on both increasing their ticket size and have a constant engagement to make customers feel more valued.

“Think of it as the physical equivalent of the personalisation you have when you, for example, visit Amazon.com as a logged-in user. Reelo is that constant effective link of communication between the merchant and the customer,” says Parin.

A B2B2C SaaS platform, Reelo works with offline businesses across industries. Its key brands include names such as Jawed Habib, Bikanerwala, Gwalia Sweets, Ferns N Petals, La Pinos and more.

The options available to Reelo clients include as tier-based rewards based on different milestones, spend-based rewards on the total lifetime expenditure, cashbacks and custom rewards. With a dedicated customer success team working closely with the business owners and their marketing team, Reelo ensures that the programme is implemented properly and there is no last-mile challenge. This team also comes up with strategies to ensure every client gets the maximum ROI (return on investment) to retain their business. Further to that, every business can see the ROI gained from Reelo on their dashboard.

“Some important metrics we use to gauge success is the percentage of enrolments of our client’s actual transactions, total reward redemptions, number of lost customers won back, the additional revenue generated on every redemption, number of new customers acquired through in-app deals and more,” Parin explained.

The startup claims that till now it has successfully helped businesses generate 10X to 1000X ROI through its platform. “We have enabled brands to increase their marketing campaign conversions to existing customers by over 150% and helped them win back approximately 25% of their lost customers,” said Parin, adding that depending on the size of the business, Reelo can show the revenue generated through its platform for each business.

Getting SMBs To Care About Loyalty

“Majority of our clients are traditional, family run-businesses who are not aware of the power of data and tech. The most successful way to get access to them is to get in front of them with a direct sales force. About 60% of Reelo’s total workforce today comprises sales personnel,” Parin told Inc42 when asked about the challenges.

One of the biggest challenges for the startup in the initial stages was to educate the business owners, the importance of data-driven marketing technology for their business. “Prit and I acquired the first 80 to 100 clients in Ahmedabad and Baroda ourselves. We had limited resources and we did everything from sales, client servicing, marketing, designing and building the product to delivering print materials and training the staff,” Parin recalled.

During this phase, the duo met many business owners, customers and more to understand their requirements and pain points. With a user-centric design, Reelo constantly makes iterations in its offerings and products based on the feedback it gathers from its users.

Its next major challenge was building the right team. Currently a team of 75 people, Parin told Inc42 that managing human capital is an ongoing challenge for the startup, but it is one which helps it evolve and grow. “After all, an enterprise is only as good as the people who make it work,” he added.

Relying on the subscription fee, renewals and more for revenue, Reelo is targeting a 50% year-on-year growth this financial year. In addition to that, it plans to expand its tech offerings in the next 18 months, to a suite of products for offline businesses, including an AI-powered marketing assistant and a social engagement platform.

“We are more focussed on building our business in India currently and are working towards penetrating deeper into existing cities to reach 8K businesses and 10Mn users by the end of December 2020.”